Dakota Gasification Company (“Dakota”) appeals from the district court’s 1 order granting summary judgment in favor of Pas-coe Building Systems (“Pascoe”). The district court ruled that the economic loss doctrine prevented Dakota from availing itself of *1096 tort remedies when structural steel beams used in an oxygen plant provided on a “turnkey basis” failed. We affirm the district court’s grant of summary judgment in favor of Paseoe.
I.
The facts involved in this ease are substantially uncontested. In 1977, several pipeline companies formed the ANG Coal Gasification Company (“ANG”). ANG contracted with Kaiser Engineers, Inc., who in turn contracted with its wholly-owned subsidiary, Henry J. Kaiser Company (“Kaiser”), for construction of a federally guaranteed $2 billion synthetic natural gas production plant north of Beulah, North Dakota. The plant was to be one of the largest synthetic fuel plants in the world and the only one of its kind in the United States. The plans in part called for the construction of an air separation plant (“oxygen plant”) to produce the oxygen which, along with coal and steam, was one of the raw materials used in the production of synthetic natural gas.
Kaiser subcontracted with Lotepro Corporation (“Lotepro”) to provide the labor, material, and equipment needed to furnish ANG with a fully functioning oxygen plant on a turnkey basis. The oxygen plant was to produce the 3,100 tons of oxygen per day needed for the production of synthetic fuel. The contract, which had an effective date of April 29, 1981, provided that “Sub-Contractor hereby guarantees the Work against defects in material and workmanship ... for a period of one (1) year after the date of acceptance ...”
In the same agreement, Lotepro subcontracted with Del Con, Inc., (“Del Con”) to furnish the pre-engineered metal building that would enclose the oxygen plant. On February 16, 1982, Del Con entered into a “proposal and contract” with appellee Paseoe Building Systems to supply the structural steel for the 130' x 325' x 60' building, and Del Con agreed to pay Paseoe $382,974 in return. Section 16 of the Del Con/Pascoe contract provides:
Seller warrants only that its products are free from defects in materials and workmanship on the date of shipment from its plant. Seller’s obligation under thiswar-ranty shall be limited to repairing or replacing (but not dismantling or installing) such products which prove to be thus defective within one (1) year from the date of the original shipment by Seller and which Seller’s examination shall disclose to be thus defective. Any products so repaired or replaced as provided herein shall be subject to warranty only for the remainder of the time applicable to the original warranty period.
THERE ARE NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE OF THIS AGREEMENT, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, AND SELLER SHALL NOT BE RESPONSIBLE FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES (SUCH AS DAMAGES TO THE CONTENTS OR FURNISHINGS IN ANY BUILDINGS) OR ANY LOSS OF ANY KIND WHATSOEVER.
Paseoe shipped structural components such as steel rafters, columns, and purlins to the plant site during the summer of 1982. During the construction process Kaiser and others conducted weld inspections and discovered defective welds on some of the Pas-coe materials. After negotiations among the various parties, Paseoe welded hundreds of steel plates over various deficient welds at its own expense to correct the problem. Final inspection of the weld repairs was completed in March of 1983. The oxygen plant was tested in 1984. On June 5,1985, after Kaiser inspected the plant on behalf of ANG and agreed that it met the specifications of the contract, Lotepro received a certificate of completion and acceptance from Kaiser. The Lotepro warranty expired one year later.
In 1986, after ANG defaulted on construction loans guaranteed by the U.S. Government, the Department of Energy foreclosed and took possession of the entire synthetic fuel plant. In an October 7, 1988, asset purchase agreement, the government sold the $3 billion plant to Dakota Gasification for *1097 less than $100 million and an agreement that Dakota would give up a certain percentage of the plant’s profits. Dakota’s contract to purchase the plant stated that the plant assets were being purchased “ ‘AS IS, WHERE IS,’ WITHOUT WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT WARRANTY AGAINST INFRINGEMENT, WARRANTY OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.”
On January 12, 1991, more than eight years after Pascoe had supplied its materials for construction of the oxygen plant, a part of the oxygen plant’s roof collapsed under the weight of ice and snow, causing damage to various items within the plant. Although the collapse caused significant damage to property, it did not cause any personal injuries. The district court assumed that the collapse was caused by a faulty weld; the parties agree that this weld was not discovered during the 1983 repair of defective welds.
On July 22,1992, Dakota and its insurance company, Industrial Risk Insurers (“IRI”), filed a complaint against Lotepro, Pascoe, Kaiser, Del Con, and others in the United States District Court for the District of North Dakota alleging negligence, strict liability, breaches of express and implied warranty, and parent and successor corporation liability. On May 17, 1995, the district court entered summary judgment against Dakota on all its claims. Dakota has settled its claims against Lotepro and is currently pursuing claims solely against Pascoe.
II.
We review the entry of summary judgment
de novo
under the same standard that governed the district court’s decision.
Lenhardt v. Basic Inst. of Technology, Inc.,
The district court held that the “economic loss doctrine” barred any tort claims, because the only physical damage was to the product itself and because Dakota, as the owner, was limited to its bargained-for warranty remedy. Although appellant agrees that North Dakota law recognizes the economic loss doctrine, it argues that the North Dakota courts would not apply that doctrine in the instant case, because the contract here did not involve a “sale of goods” and because “other property” was damaged by the defective Pascoe product.
We must apply the law of North Dakota to this ease. Although the North Dakota Supreme Court adopted the economic loss doctrine in
Cooperative Power Association v. Westinghouse Electric Corporation,
A.
Dakota first argues that no sale of goods under the Uniform Commercial Code was involved here, and that therefore the economic-loss doctrine cannot apply. The Uniform Commercial Code states that “ ‘[g]oods’ means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale....” N.D. Cent.Code § 41-02-05(2) (1995);
see also Robertson Cos., Inc. v. Kenner,
*1098 Dakota contends that Pascoe’s subsequent weld repairs constituted a contract for services, and that its claim that Pascoe was negligent in performing these services is not governed by the UCC. Section 16 of the Del Con/Paseoe contract states that “Seller’s obligation under this warranty shall be limited to repairing or replacing ... such products which prove to be ... defective within one (1) year from the date of the original shipment by Seller....” Following discovery of the defective welds, Pascoe and the other parties established a protocol concerning the necessary repairs, and Pascoe completed the repairs at its own cost and in accordance with the preexisting contract. There was no separate contract for services.
The Supreme Court of North Dakota has held that,
[i]n contracts involving both a sale of goods and a rendition of services, if the predominant factor, the thrust, the purpose reasonably stated is the sale of the goods with the rendition of services incidentally involved, the contract is for a sale of goods and the Uniform Commercial Code is applicable ....
Robertson,
B.
In
Cooperative Power Association v. Westinghouse Electric Corporation,
In Cooperative Power, the purchaser of a transformer sued its manufacturer under theories of both negligence and strict tort liability. A bushing in the transformer had failed, causing damage only to the transformer itself. In explicitly adopting the East River rationale, the North Dakota court reviewed the policy considerations stressed by East River:
(1) tort concerns with safety are reduced when a product damages only itself; (2) damage to only the product itself means the product has not met the customer’s expectations and is most naturally understood as a warranty claim; (3) warranty law is well suited for commercial controversies, which generally do not involve large disparities in bargaining power, so the parties can contractually set the terms of their agreements and, within limits, disclaim warranties or limit remedies while allowing purchasers to obtain the benefit of their bargain; (4) warranty law has built-in limitations on liability based on *1099 privity and the requirement of foreseeability of consequential damages as a result of a breach, whereas tort law confers a duty to the public generally and permits recovery for all foreseeable claims, which could subject manufacturers to indefinite economic losses by a purchaser’s customer; and (5) recovery under warranty law establishes a bright line for damages to the product itself and avoids the uncertainty inherent in any attempt by courts to limit purely economic damages in tort.
Id. at 664.
The trial court here determined that the economic loss doctrine applied for two reasons: first, because the damage was only to the property itself, that is, only to the oxygen plant and buildings constructed pursuant to the Lotepro/ANG turnkey contract; and second, because even if a factual dispute existed over whether the oxygen plant was a single product, the damages were only to the property of the buyer and were well within the contemplation of the parties to the contract. The trial court found that the North Dakota courts, if faced with this situation, would limit the property owner to warranty remedies. Because we agree with the second reason, we need not determine whether the oxygen plant itself was a single product.
C.
Dakota argues that the economic loss doctrine cannot apply here because the damage was not merely to the Pascoe-supplied steel, but also to the building containing the steel and to the oxygen plant and its equipment. Many of the economic loss cases, including Cooperative Power, state that the doctrine protects a commercial supplier from tort claims where there is no personal injury or damage to “other property.” The rationale for this approach is that using the economic loss doctrine to prevent tort remedies for damage to other property or to third parties is inappropriate because such damage was not within the contemplation of the contracting parties and the parties therefore did not fairly bargain for this additional unforeseeable risk.
The trial court recognized that the modern trend in many jurisdictions holds that tort remedies are unavailable for property damage experienced by the owner where the damage was a foreseeable result of a defect at the time the parties contractually determined their respective exposure to risk, regardless whether the damage was to the “goods” themselves or to “other property.” Although there is no North Dakota case directly on point, the reasoning used by the courts that have accepted this modern trend, along with the North Dakota Supreme Court’s reasoning in Cooperative Power, lead us to conclude that the modern trend’s approach is entirely consistent with North Dakota’s prior treatment of the economic loss doctrine.
In
Detroit Edison Co. v. NABCO, Inc.,
In
Neibarger v. Universal Cooperatives, Inc.,
We agree with the trial court that this case is similar to Detroit Edison because the defective structural components caused great damage to surrounding property, but such damage was within the contemplation of the parties when they signed the contract. Del Con, like the purchaser in Detroit Edison, entered into the agreement after evaluating the risks and liabilities that potentially would follow if thé materials failed to perform. The Del Con/Pascoe contract in fact specifically provided that “SELLER SHALL NOT BE RESPONSIBLE FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES (SUCH AS DAMAGES TO THE CONTENTS OR FURNISHINGS IN ANY BUILDING) OR ANY LOSS OF ANY KIND WHATSOEVER.” This language demonstrates that the damage which occurred here was well within the contemplation of the parties.
A contrary holding would yield results that conflict with the economic loss doctrine’s purpose, as recognized by the North Dakota Supreme Court in Cooperative Power. Allowing tort remedies in a case such as this would perversely encourage contractors to “bargain” for no warranty or insurance protection in exchange for a reduced purchase price, because they could rely on tort remedies as their “warranty.” Such an outcome is plainly inconsistent with the values of commercial efficiency and predictability that drive the economic loss doctrine and that were praised in Cooperative Power.
Dakota presents us with no authority indicating that North Dakota has rejected this modem trend.
2
Although Dakota cites
Cooperative Power's
discussion of
Vantage, Inc. v. Carrier Corp.,
*1101 We therefore agree with the district court’s prediction that the North Dakota Supreme Court would adopt the modern trend, and conclude that the economic loss doctrine extends to preclude liability in tort for physical damage to other nearby property of commercial purchasers who could foresee such risks at the time of purchase.
III.
In sum, we hold that because the damage to the oxygen plant from Paseoe’s defective product was a harm that was reasonably foreseeable to the parties to this commercial transaction, contract law, and not tort law, must provide the remedy for this purely economic loss. We need not consider whether the district court correctly considered the oxygen plant to be a single product, because under North Dakota law the economic loss doctrine bars Dakota’s tort claims even if the oxygen plant was not a single product.
Accordingly, we affirm the judgment of the district court.
Notes
. The Honorable Patrick A. Conmy, United States District Judge for the District of North Dakota.
. We note that Dakota’s attempt to apply the asbestos cases of
MDU Resources Group v. W.R. Grace and Co.,