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Industrial Uniform Rental Co. v. International Harvester Co.
463 A.2d 1085
Pa.
1983
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*2 JOHNSON, HESTER, JJ. Bеfore CIRILLO JOHNSON, Judge: is whether question before this court liability1 in strict for recov- recognize

courts should a claim (Second) Torts 402A 1. Restatement only in the losses,2 injury where ery of economic itself, is not the result of deterioration damag thereby untoward occurrence causing defect some ing product. pur- Inc. System, Rent A Car September

In 1971 Avis from International Har- chased certain number trucks corporations,- appellant In 1971 the vester Co. October Diaper Inc. and Ser- Rental Stork Industrial Uniform use in Avis -for their vice, Inc., leased the trucks from appellant corporations Then business. October from Avis. these same trucks purchased had allegedly of these trucks In December 1972 two frames, which were and failures in developed cracks Then, after the 1974 purchase Avis. repaired by trucks, developed allegedly more trucks cracks twelve repaired by These cracks were failures in the frames. *3 appellant corporations. corporations appellant

In of 1978 the June commenced Harvester, in International trespass against this suit trucks, design, man- negligent alleging manufacturer of the trucks, requesting damages for sale of the ufacture and answér, In under to the its repairs the cost of the trucks. the bar of the Matter, raised New International Harvester limitations, denied in their appellants statute of which damage” claim it reply, being “property that this alleging for trespass of limitation actions. was within the statute until A was undertaken discovery certain amount Harvester filed motion for March when International appellants’ claim was arguing that summary judgment, losses, allegations the com for that the solely economic harm has been defined as "an 2. An to recover for "economic” action value, damages inаdequate brought costs of action to recover consequent product, repair replacement the defective loss of injury any personal profits—without to other claim Note, Liability Jurisprudence, property." Loss in Products Economic Liability: Appel, Strict See also 66 Colum.L.Rev. (1976) Loss, (stating L.Rev. Recovery 13 Idaho "Economic" damages often to as direct itself is referred to the loss, bargain, replace- by cost of the loss on economic ment, measured repair). or cost of plaint defective, trucks were poorly designed and not adequate use, for their contemplated sounded in breach warranty, and that therefore the action was barred section 2-275 of the Uniform (UCC).3 Commercial Code

In answer to the motion for summary judgment, appellants argued inter alia that their claim for damages included not only repairs to the trucks but also a “diminu- tion in use expectancy,” and that their claim was indeed a tort In action. their memorandum of law in support of their answer the appellants raised for the first time the question of section 402A of the (Second) Restatement Torts, asserting that Pennsylvania law supported their ac- tion “under 402A and in negligence against the manufactur- er of trucks where defects cause damages sustained.”

The trial opinion its stated that the uncontradict- ed evidence plaintiffs established that were seeking damages for defects of quality evidenced internal deteri- oration or breakdown which constituted economic loss not recoverable a claim under strict liability, granted motion for summary judgment. appeal

On to this appellant court the purchasers of the trucks assert thаt (unspecified) defects in the trucks brought about the cracking and caused damages to the trucks, thus creating a cause of action for “property dam- age” under section 402A of the (Second) Restatement Torts. ’ believe,

We on the contrary, that the claim in this case is *4 precisely the of type envisaged claim by the UGC. See 13 § 2714, Pa.C.S.A. provides: which § Damages buyer 2714. of for regard breach in to accepted goods Code, Pennsylvania 6, 1953,

3. The Uniform Commercial April Act of 3, 1, re-enacted, P.L. seq., revised, No. § 1-101 et as amended and 12A 1, 1979, P.S. seq., repealed § 1-101 et was the Act of November P.L. 255, 86, No. It enacted § and transferred to Title 13 of the Pennsylvania change Consolidated Statutes without in substance 1, 1979, 86, the same act. See Act of November P.L. No. 7. 13 § (Purdon Pa.C.S.A. Pamp.1982). §§ 1101-9507 of tender.—Where (a) nonconformity Damages for (section notification given and buyer accepted goods hаs for nonconformi- 2607(c)) damages any as may he recover of ordinary in the course resulting of tender the loss ty in any determined of the seller from the breach events as. manner which is reasonable. warranty.—The

(b) for breach damages Measure of is the differ- damages for breach measure acceptance between place the time and ence at they would and the value goods accepted value warranted, cir- special unless if had they have been a different damages of proximate cumstances show amount. proper

(c) consequential damages.—In Incidental and consequential damages under case incidental and any consequential dam- (relating to incidental section 2715 also be recovered. ages buyer) may facts of this case agree appellants We do not with 402A of the Restatement application call for the of Section Torts,4 (Second) provides: which Liability Product for Special of Seller of 402A. Physical or Consumer Harm to User in a defective condition (1) sells any One who the user or consumer or his dangerous unreasonably harm physical thereby subject consumer, proper- his the ultimate user or or to caused to if ty, selling in such

(a) the seller is the business engaged product, the user or consum- (b) expected it is to and does reach in the condition which it change er without substantial is sold. (1)

(2) applies although The rule stated in Subsection (a) possible exercised all care the seller has product, and sale of his preparation adopted by Supreme 402A was Court of 4. Section Zern, Pa. 220 A.2d 853 Webb *5 70

(b) the user or bought consumer has not the from or entered into any contrаctual relation with the seller.

There are two presented lines of cases on the by issue this appeal. view, There the majority led the land- mark Supreme decision Court of California in Seely v. 9, Motor White 63 Cal.2d 403 P.2d 17 Cal.Rptr. (1965). view, There is minority also the equally led significant decision of the Supreme Jersey Court of New in Inc., Santor v. & M. Karagheusian, A. N.J. 207 A.2d In the plaintiff Santor carpet- sued the manufacturer of ing for defects which-caused to appear carpet- lines ing. The New court Jersey supreme held first that plaintiff could sue the implied manufacturer for breach of warranty, that privity of was necessary, contract not and that the action could though be ‍‌​‌​‌‌​‌​​​​‌‌‌​‌‌​​​​​‌‌‌​‌​‌‌‌​‌‌​‌‌‌​​‌​​‌​​‌‍maintained even was limited to -loss of value of the carpeting. The New Jersey then on to went rule that the responsibility the maker should be no different whether the damage was personal to injury, damage other or to the product involved, and that strict liability applicable tort was actions for resulting economic losses from prod- ucts.

In plaintiff purchased a truck for Seely heavy-duty hauling. the beginning purchasers From experienced a “galloping” truck, problem attempted with the which they repair. Then one day failed, brakes the truck overturned, personal causing injuries resulting no but over five thousand dollars’ of damage worth to the truck. court, supreme California with disagreeing the New Jersey court, ruled system recovery UCC superseded not by the doctrine of which applied to actions for personal injury property damage only, alone, for not actions economic loss there could no be recovery injury for the to the truck under strict liability. part reasoning As of its the California court considered the purpose the two distinct remedies: *6 tort drawn between the law has that

The distinction for recovery warranty and injuries recovery physical for rest on does not and arbitrary is not loss economic causing in an accident having plaintiff of one “luck” rather, an rests, on The distinction injury. physical a manu- responsibility nature of the of the understanding He his distributing products. in undertake must facturer injuries physical for be held liable appropriately can to match goods his requiring by defects by caused conditions in terms of safety defined standard held He cannot be of harm. risks unreasonable create in the con- products of his performance for the level product that the agrees unless he business sumer’s A consumer demands. meet the consumer’s designed to the manufacturer the will of charged at not be should buys he when physical injury the risk of bearing with however, fairly be can, market. He on the product match his not will product the risk that the charged with agrees manufacturer unless the expectations economic a manufac- negligence, for in actions that it will. Even injuries physical for damages limited to liability is turer’s The alone.... economic loss recovery no for and there is liability limits strict similarly of Torts Restatement property. person harm to physical 151, at 403 P.2d at 63 Cal.2d Motor Seely White omitted). (citations at 23 Cal.Rptr. 45 developed primarily liability was products doctrine of The for compensated consumers could be by means which as a caused injury personal Note, Liability in Commercial Products See products. (1976). generally, 1061 See Transactions, Minn.L.Rev. Jurispru- Liability Products Note, Loss in Economic (1966). theory, dence, 66 Colum.L.Rev. Code, however, the Uniform Commercial governed by now inju- other bargains on for losses for provides meet the failure of the resulting from ries has breached the seller buyer where expectations Ribstein, buyer. to the See warranties express implied Cases, Product Deciding Guidelines Economic Loss (1978).5 Mercer L.Rev. 493

It would seem that the Seely Santor lines cases line Seely differ focuses on the type harm product, caused the defective whereas the Santor line seems view a defective an essentially unmer- UCC, chantable under see 13 Pa.C.S.A. § 2314(b). Note, See Products Liability in Commercial Transactions, 60 Minn.L.Rev. 1068-69

We believe of harm” validity “type approach, particularly on the facts of the case before us which involve buyer a commercial of trucks for use its business claim- *7 ing expenses its because the it trucks leased and later purchased were An allegеdly defective. analysis the law in Pennsylvania case and elsewhere supports this view. Protection, In Inc., Lobianco v. Property Pa.Super. 292 (1981), 437 A.2d 417 this court held that a homeowner had purchased who a alarm burglar system which malfunc tioned could a bring liability not action against the system seller the for the loss she incurred in the theft of her This jewelry.6 helpful case is to the that extent it a seems indicate reluctance this court to allow strict liability for recovery purely economic loss. See also R.B. Williams, v. Equipment Shields, Goas, Co. Snyder & 304 A.2d Pa.Super. 85 In R.B. Equipment fact, argues 5. Professor Ribstein there is no clear distinction involving gradual repair between cases loss due to deterioration defect, because of a to the a where defect brought calamity, causing injury. propos- about the He therefore cases, deciding рrimary a formula es for economic loss where the loss, liability property damage basis for or economic would be (i.e. representational representa- manufacturers would held be to their tions), (i.e. supplemented negligence duty requiring a the manufac- risks) reasonably intentionally disregard turer to act not so as objective liability. to retain the deterrence 29 Mercer at L.Rev. 511. joined by judges, The rationale this was decision two with two result, judges concurring judges dissenting in the and two on the grounds liability that the seller’s clause limitation was unconsciona- ble. from as an quashed interlocutory appeal superior preliminary defendants’ sustaining order trial court’s complaint counts a to the strict objections allegedly suppliers against manufacturers roads, sidewalks, constructing cement and concrete used Wiсkersham, public in a school curbing project. and stairs trial court. Part of would have affirmed the dissenting, J. plaintiff dissenting opinion of the was rationale of the but authority—the product, not the school user general importantly contractor. More assignee an though, Judge quoted for our Wickersham with purposes, v. from the rationale in Associates East- approval Posttape — Cir.1976), Co., (3d q.v. page 537 F.2d 751 man Kodak infra.

A law is applying Pennsylvania Pennsylvania recent case Caterpillar Tractor Corporation Glass Sand (3d Cir.1981). Corpora- F.2d Glass Sand Caterpillar against brought diversity tion action [PGS] manufacturer, damages it incurred Tractor, the to recover purchased from of a fire in a front-end loader result out, Caterpillar. pur- The fire four after years broke chase, hydraulic lines. in the front of loader near loader, although no spread, severely damaging The fire *8 in complaint resulted. The basis of PGS’ personal injuries (§ 402A) a negligence and was the absence of (In fire a footnote the suppression system. or extinction court the statute of limita- explained four-year that UCC claim.) court, predicting The tions had barred the possibly address the Supreme how the of would Court prod- the of whether accidental defective question injury regarded itself as an loss recovera- uct should be economic action, the belief only warranty expressed ble a contract a distinc- Pennsylvania supreme that court would draw the tion the of to defective that type injury between loss, mere and that type injury constitutes economic the of traditionally compen- to the of harm physical amounts sort 652 F.2d at 1173. sable tort.

74

The court its earlier in Posttape PGS discussed deсision (3d Associates v. Eastman Kodak F.2d Cir. 1976). In sought film maker in- Posttape to recover profits resulting creased costs and lost from defective film supplied by Posttape Kodak. The court decided that sec- tion 402A was of in a utility setting doubtful commercial when damages the were consequential and arose from a non-dangerous impairment quality product, and provisions the were better such UCC tailored to a situation. PGS noted that “implicit Posttape [the ]

opinion ais recognition the difference for between claims economic loss and the physical damage to addition, 652 F.2d at “In product.” [Posttape the ] opinion alluded the policy distinctions that make the proper U.C.C. the vehicle for redressing losses occasioned by impairment of quality, make 402A the superior for-rectifying consequences device thе de- dangerously fective products. PGS, at [Posttape, 755.” F.2d] F.2d at 1174. reviewing

Finally, the circumstances of the al- damage PGS, that, leged by the court decided as the nature of the defect the it type poses factors, risk are the guiding fire, and that as the the was result of a hazard, safety defect constituted a complaint brought by to fall appeared PGS within the policy of tort law that the manufacturer should bear risk of hazard- products. Furthermore, ous at court, Id. 1174-75. said complaint did not appear implicate policies law, because there were no allegations that the loader of poor was quality perform otherwise unfit to its Id. at 1175. The job. court concluded that Pennsylvania courts would regard injury stemming from the allegedly defect in the hazardous loader as the sort of physical injury compensable under tort It law. hazardous condi- tion that removed the situation from the embrace *9 UCC. Circuit, Third Appeals Court of for the

The United States case, Court of Supreme in another how the predicting, economic losses question Illinois7 decide the whether would ruled that liability, under tort theories of are recoverable not under strict of a roof could recover purchaser the to perform.8 of the roof liability or for failure negligence explained: the court As personal injury strict rationale behind eco- alleging only to claims

situations is not well-suited the results from the failure of nomic loss. Economic loss expected the by buyer the level perform measured the frequently by loss is most the seller. Such in the by difference infirmity cost of repairing it as it exists and the value would value Thus, expected. if it as economic performed have had n always incurred the owner of loss almost it into persons merely use or come product, not who a purchaser, particularly it. The original contact with protect & can large Laughlin, such as Jones company performance by risk against unsatisfactory itself may it choose to bargaining warranty. Alternately, for a purchase a lower forego warranty protection favor of do product. Subsequent purchasers may for the price product. In bargaining price likewise in over event, owner of the persons because other than the any resulting incur not economic losses from product will performance, costs associated with product’s poor price in the likely economic loss will be reflected would to be no need to product. accordingly There seem mechanism through non-price internalize these costs liability. such explained Appeals court had concluded

7. The Court of district state would Illinois law under its look to analysis/significant contacts” choice of law test. See 626 "interest at F.2d square finishing roof to cover a 1.3 million foot steel 8. The was built region subject high speed plant in a and extreme fluctuation winds blistered, Shortly completion temperature. after its the roof wrin- in kled, later, cracked; result, parts it blew As a water off. causing damage. plant serious entered the *10 Jones Laughlin & Steel Corp. Johns-Manville Sales Cir.1980) Corp., (3d (footnote ‍‌​‌​‌‌​‌​​​​‌‌‌​‌‌​​​​​‌‌‌​‌​‌‌‌​‌‌​‌‌‌​​‌​​‌​​‌‍omitted). 626 F.2d 288-89 The court further explained:

Finally, liability extension strict here proposed Laughlin appear Jones & to would conflict with the decision the Illinois Legislature enact the sale provisions (UCC)____ of the Uniform Commercial Code Section 2-313 the Code recognizes the existence of § warranties, express 2-314 implied enacts an war- ranty merchantability and fitness. Section 2-314 pro- vides that ..., excluded modified a warranty “[u]nless the goods shall be implied in a merchantable contract for their merchantable, sale .... To be alia, goods, inter ordinary must be “fit for the purposes such are goods which used.” ... Code also however, provides, that the parties a sales contract agree may buyer possesses warranty protec- no all, tion may at limit any any warranties reasonable § manner. Id. 2-316. The parties may agree even the implied exclude fit- warranty merchantability and ness if they writing, do so may modify implied § warranty by clear and 2- conspicuous language. Id. 316(2).

The extension of strict liability to cover economic losses in effect would amake manufacturer the guarantor that products all of its would continue to perform satisfactori- ly throughout their productive life. Inasmuch reasonably doctrine of liability not permit does a manu- facturer to limit its through the use of waiver or a limited warranty, importation of strict liability into the economic loss area supersede would effectively Yet, 2-316 of the nothing UCC. there is in prior opinions of the Supreme Illinois to suggest Court that it would an undertake such encroachment on legislative prerogative. Supreme As the Court Idaho remarked recently dealing very question: with this legislatures Union, of nearly every state in the [T]he adopted have which carefully painstaking- UCC parties in a sales rights sets forth the between ly Court, loss. regard to This transaction with economic this the tort law of in the common law evolution of in this state, must action recognize legislature’s when of commercial law аnd should accommodate area principles tort law with the possible evolution laid down in v. International Harvester UCC. [Clark 326, 335, (1978)]. Co., 99 P.2d Idaho *11 Supreme not that the Illinois Consequently, we do believe in the liability of tort would extend its common law Court suggested by Laughlin. manner Jones & reasons, the Illinois foregoing predict For the we hold are not Court would that economic losses Supreme tort law. principles under claims based on of recoverable omitted). (footnote at 289 Id. rationale, of appears to coalesce with the view

This which issue, to this to be on this seems court jurisdictions most one, Pennsylvania the one courts correct which adopt. should in in support jurisdic- find further recent cases other

We following majority view. tions pur- has held that the Supreme The Court Nebraska loss- a recover economic chаser of defective cannot harm negligence liability physical under absent es In product. caused the defective persons by Co., v. Tube 213 Neb. Corp. National Crane Ohio Steel 782, (1983), a plaintiff 332 N.W.2d 39 was manufacturer and ex- sought cranes which costs recover tilt tubing defective used penses removing steel supreme mechanism of its cranes. The Nebraska cylinder re- concluded that the were those damages involved products and purchase unsatisfactory from the sulting pursued cause action for loss should such be theory. or contract under Illinois, approving the Third Cir- Supreme Court Sand, held supra, rationale in Glass cuit’s is econom- damaged, the defective only that “where qualitative ic losses caused defects falling under the of a purchaser’s disappointed ambit expectations cannot be recоvered under a strict theory.” Moorman Manu 69, facturing Co., v.Co. National Tank 91 Ill.2d 746, 753, (1982).9 Ill.Dec. 435 N.E.2d In Engineering Northern Power & Corp. Caterpillar (1981), 623 P.2d 324 Tractor an action aby buyer against the manufacturer of generator engine whose causing damage machine, failed severe to the Supreme buyer’s Court Alaska held that the loss entirely economic and not thus could be recovered under strict liability in tort.

In argued Northern the buyer Power further that the oil mechanism, pressure being shutoff having defective and damaged engine, was a resulting plaintiff’s (i.e. to the property, generator caus- ing “property damage”). argument This the same presented to this court appellant corporations now before us. The Alaska court to the responded argument thus:

While proposition we think this may validity have some *12 where the components provided are sold separately are by different suppliers, justification we find no or support for such rule a where both are components provided by one supplier as of part complete integrated pack- a and age. Since all very simplest but the machines of have component parts, such broad a holding require a would finding of “property damage” in virtually every case where a product damages a holding itself. Such would eliminate the distinction between and strict products liability.

Northern Power & Engineering Corp. Caterpillar v. Trac- tor, (footnote 623 omitted). P.2d at 330 The Alaska su- preme court ruled that a product when defective a creates in, alia, processor complaint In Moorman food filed a inter strict liability negligence and for the resulting economic losses from an alleged grain storage in Supreme crack tank. The Illinois Court concluded type proteсted by that this was a commercial loss the the warranty. law

79 property, or other persons hazardous to potentially situation liability danger, result of that loss occurs as a and though even the theory recovery is an appropriate tort at 329.10 itself. P.2d product is confined to the damage there was no evidence generator the case But because danger system presented any that the defective shut down engine simply but caused property, or other persons only. economic loss this was up stop operating, to seize dispose likewise this rationale and We borrow from shall not clas- damage We appellants’ property argument. leading manufacture to deteriora- sify allegedly defective in the section 402A property damage tion sense. similarly preferred of Minnesota has Supreme Court arising and held that economic losses rationale Seely transactions, involving excepting of commercial those

out recov- to other are not personal injury damage property, liability. or strict negligence under tort theories erable Minn., 311 Corp., Superwood Siempelkamp Corp. (1981)(where plate press of a hot buyer N.W.2d action for cylinder brought failed an which press profits). for lost Texas, Tex., Shivers, In Inc. v. Nobility Homes of Texas (1977), held Supreme S.W.2d Court could an action bring of a defective mobile home buyer manufacturer, loss, negli- to recover economic against and in not in strict gence warranty, but because unreasonably dangerous was not did not cause buyer property. harm to the or to his physical authority Extrapolating from above-mentioned In an following formulate the rule: аction between we design, manufac enterprises, commercial where alleged, nothing ture and sale of a where there is *13 is record indicate that the defect a condition the a 10. The Alaska also ruled that in order recover on such court (1) proximate theory plaintiff was a of show that the loss result must defect, (2) dangerous and that the loss occurred under the kind of liability. Id. a basis for strict circumstances that made dangerous to potentially persons or to property, and where defect purported results in progressive deterioration of itself, the buyer’s cause action for its eco- against losses nomic the seller is in breach under UCC.

Furthermore, complaint case, in the instant cap in trespass tioned and alleging “negligence and carelessness in designing, ... manufacturing, selling trucks,” (1) nevertheless is totally insuffiсient state a cause of action in strict liability, which claim only was asserted at the time of the (2) motion for summary judgment its very language that the adequate trucks were “not for their contemplated use” clearly possible states cause action in breach of is warranty,11 and therefore barred because it brought was more than years four after tender delivery trucks. 2725. Pa.C.S.A. The order trial granting summary judgment is affirmed.

HESTER, J., files dissenting opinion. HESTER, Judge, dissenting: I dissent. The issue for review is whether a cause of action from arising a defective causing damage only to the product itself properly grounded tort under § 402A of the ‍‌​‌​‌‌​‌​​​​‌‌‌​‌‌​​​​​‌‌‌​‌​‌‌‌​‌‌​‌‌‌​​‌​​‌​​‌‍(2d). Although Restatement Torts this issue has not been adjudicated finally appellate our courts, the United States Court of Appeals for the Third Circuit, in Pennsylvania Corp. Glass Sand v. Caterpillar (3d Cir.1981), Tractor 652 F.2d 1165 pre- decided this cise issue acсording to its informed and cautious belief of how the I Supreme Court would rule. will consider Sand, Pennsylvania Glass supra, both forum and non-forum decisions in reviewing this issue of near first impression.

Section 402A of (2d) Restatement Torts adopted by the Pennsylvania Supreme Court in v.Webb See, 2313, 2314, e.g., 11. 13 Pa.C.S.A. §§

81 424, (1966). Zern, Liability 422 Pa. 220 853 under A.2d. 1) 402A is restricted as follows: the defendant must be product alleged in the to be engaged selling business defective; 2) prod must render the defective condition 3) must be unrea unreasonably dangerous; product uct 4) the dangerous property; to the consumer or his sonably to the ultimate user or physical must cause harm product consumer, and, 5) expected “the is or his property; does reach the user or consumer without substantial and 1 it change the condition which was sold.” damage It is not in that here was to the dispute themselves, trucks. products namely, delivery damage prod- to the defective Appellants physical aver § 40.2A; purview conversely, appellee uct lies within the an economic loss for solely maintains that such is sought which' retribution is in commercial law. traditionally for Ascertaining liability physical the correct theories of person, to the consumer’s or ultimate user’s or to the injury or user is not an non-defective of the consumer upheld 402A has been fre assignment. abstruse Section for these quently consistently as the mode of recourse injuries. Corp., 462 Brantly Helicopter See Berkebile 83, (1975); Pa. 337 A.2d & Speyer, 893 Inc. v. Humble Oil (W.D.Pa.1967),affirmed 403 F.Supp. Refining (3d Cir.1968), F.2d 766 certiorari denied 394 U.S. abounds, Ambiguity 23 L.Ed.2d 41 how-

S.Ct. Physical Special Liability of Sellers of Products for Harm to User Consumer. (1) any product unreasonably who sells in a defective condition One dangerous property, subject or consumer or tо his to user thereby physical caused the ultimate user or harm consumer, property, or to his if (a) selling engaged product, the seller is in the business of such a (b) expected it is and does reach the user or consumer without change in which it is sold. substantial in the condition (2) (1) applies although subsection rule stated in (a) possible preparation all care in the seller has exercised product, and sale of his (b) bought the user or consumer has not from or any entered into contractual relation with the seller.

ever, where effects of the reach defect no further than the defective itself.

Damage incurred product only the defective is often solely considered plaintiff economic loss where the suffers pocket expenses, out of loss of bargain, replace cost *15 or repair. Co., ment Seеly v. White Motor Cal.2d Cal.Rptr. 17, 403 P.2d 145 presume Some courts economic simply loss because the defective alone is damaged; the nature of the defect and the manner in which damage was inflicted is immaterial. For in example, Mid Continent Corp. County Curry Spraying Ser Aircraft vice, Inc., (Tex., 1978), 572 S.W.2d 308 an aircraft was to an emergency forced crash landing because the defend ant/manufacturer failed to install gear a crankshaft bolt plate. lock The aircraft received extensive damage upon landing. The Mid categorically Continent court labelled damages to the defective product itself economic losses governed solely by the Uniform Commercial Code. All damages itself, to the regardless defective of de gree inflicted, or manner were deemed losses to the pur chaser of the benefit of the with bargain the seller—a classic measure contract damages. general

This rule by projected Seely, supra, and Mid Continent, has in supra, qualified been .diverse fashion. § The applicability 402A and has warranty law been by considered some to weigh heavily upon courts the nature of the defect and the in manner which the devel- oped. example, For in Pennsylvania Glass Sand Corp. (PGS) v. Caterpillar supra, Tractor the court distin- guished both theories on that basis. PGS filed its diversity § action in negligence 402A; and strict under it did allege not of warranty. breach cause of action arose from a design defective in a that front-end loader PGS purchased from defendant/manufacturer. Following years PGS, four front by portion operation caught loader fire. Due to the defendant’s omission of a fire extinguishing system design, from spread the fire $170,000 exрended undeterred. repairs, PGS in rental of a of fire suppressant installation replacement temporary summary motion for defendant’s Similarly, equipment. court on that grounds the trial granted judgment loss not recoverable economic purely suffered a PGS had tort. our premise espoused by

Although impressed 432 Pa. Soya, v. Central Supreme Court Kassab § 402A and are i.e., implied warranty that (1968), A.2d 848 application, Glass Pennsylvania coextensive (cid:127)nearly appli- equally the theories were not opined Sand It held that disputes. product-oriented in all cable qualita- redress from are more suitable for action causes of ad- defects, appropriately 402A is more whereas tive damage. causing defects calamitous to hazardous dressed Sand, words, according to Glass In other resulting itself damage to supra, *16 еco- deterioration or breakdown from internal gradually § to the defective loss; physical injury 402A nomic of violent accidents. arise as the result must Sand, was supra, Glass Pennsylvania The defect extinguishing a fire equipped a loader with design failure to particu- result, conflagration the risk As system. haz- especially of the loader operation and the larly acute concluded, court Glass Sand Pennsylvania ardous. The properly brought therefore, the cause of action was that in. under 402A. tort Sand, supra, Glass acknowledge

I dam- of the twelve here. The apply inspections not does front brack- spring for disclosed broken welds aged trucks cross-members, rails, ets, spring frame fractured broken straps, tank support mounting plates gasoline fractured support posts. and twisted mounts shock absorber broken three two оr by appellants detected damages were These and initial agreement lease of the following execution years therefore, trucks; gainsaid it cannot be operation that damages here were incurred more gradually than abruptly.2

Certain have jurisdictions expanded the exception to the pure theory beyond economic loss sudden, calamitous infliction of harm to the defective product itself. Where the defect causes the defective alone to incur damages manner, in a gradual yet deterioration is not commensu- rate ordinary expected with wear and tear to the product, the common law tort theory of negligence is a permissible recourse. Spence v. Three Rivers Builders Inc., and Masonry Supply, 120, 353 Mich. 90 N.W.2d 873 (1958); Sons, Oliver B. Cannon & Inc. v. Dorr-Oliver, Inc., (Del.Super., 1973). A.2d 322

The “consumer expectation” test adopted by Spence, supra, and Sons, Oliver B. Inc., Cannon & supra, was applied to a strict liability cause of action 5th Circuit Court ‍‌​‌​‌‌​‌​​​​‌‌‌​‌‌​​​​​‌‌‌​‌​‌‌‌​‌‌​‌‌‌​​‌​​‌​​‌‍of Appeals in Two Rivers Co. v. Curtiss Breeding Service, (5th Cir.1980), 624 F.2d 1242 rehearing denied 629 (5th Cir.1980), F.2d 1350 denied, certiorari 450 U.S. S.Ct. 67 L.Ed.2d 348 The plaintiff purchased processed bull semen by the defendant for the purpose of artificially its inseminating Impregnation resulted; cows. however, genetic abnormality, syndactylism, developed some offspring. plaintiff attributed the birth defects semen; to the consequently, sought it damages for the reduced value of its entire Initially, herd. the Two Rivers types 1) discussed the four common personal loss: injury to physical injury the user or to the user’s property, itself; other 2) than the defective economic loss of *17 value resulting product from a rendered defective by poor materials; 3) or economic workmanship loss to the defective product itself; and, 4) physical harm to the user’s other product as well as the defective itself. These categories were discussed for informational purposes only; the Two did Rivers court not consider the of object injury or example application For a liability further of § 402A to damages itself, precipitously imposed on the defective see (Alaska 1977). Manufacturing Cloud v. Kit P.2d 563 248

85 Instead, first led it was dispositive. loss be type and strict sales distinction between categorical simple Texas, v. Shiv- Inc. Homes proposed Nobility liability i.e., governs law (Tex.1977), that sales ers, S.W.2d 77 557 consumers sellers and relationship between the economic nature the distinct addresses liability whereas strict goods, distinction, according to Two This physical injuries. car- responsibility the extent Rivers, supra, determines For marketing product. his manufaсturer ried aby products those only for instance, he liable strictly will be become dangerous” thereby “unreasonably that are “un- is use. Whether for their intended unsafe therefore, the manu- and, subjects reasonably dangerous” expectations on the depends liability, facturer to strict are afflicted as most cattle breeds Insofar the consumer. defects, the Two Rivers genetic type with some expecting chargeable with was plaintiff concluded containing defective of the bull semen accepting the risk or an unavaila- liability strict spermatozoa; consequently, of action. ble cause damages little care whether jurisdictions other

Still itself, whether upon the defective imposed only are or whether the gradually, or damages violently accrued For the consumer. expected by damages were particular shall be damages injuries example, products places who the manufacturer borne commerce; injuries such the cost of the mainstream of powerless the consumer who shall not rest with damages Co., 26 himself, Davidson Motor Harley v. protect Cova (1970); A & M 602, 800 Santor v. 182 N.W.2d Mich.App. 52, (1965); where 207 A.2d 305 Inc., 44 N.J. Karagheusian, are principles tort positions, unequal bargaining there are consumers, Inc. v. Forge, Midland protect permitted 1975); (N.D.Iowa, Inc., 506 F.Supp. Industries Letts Electric Westinghouse Inc. Forest Industries Southwest Cir.1970), certiorari denied (9th 422 F.2d Corp., (1970); the law of L.Ed.2d 138 91 S.Ct. U.S. promul- at the time of inculcated liability was products *18 gation of the Uniform Code, Commercial and with no Uni- form Commercial Code provision usurping the role of negli- gence tort, intentional liability applies without deference to law, commercial Jig the Third Corp. v. Puri- tan Marine Ins. Corp., (5th Underwriters 519 F.2d 171 Cir.1975), rehearing (5th denied 522 Cir.1975); F.2d 1280 finally, where the damage is limited to the alone, § there is a proposal for the applicability of 402A to determined by be the degree of loss to the consumer and not the manner in which harm Rubin, occurred. “Products Liability: Expanding the Property Damage Exception in Pure Economic Cases,” Loss 54 Chicago-Kent L.Rev. 963 jurisdictions

Some policy cite grounds for determining the § 402A, applicability of In Jones & Laughlin Steel Corp. v. Johns-Manville (3d Sale Corp., Cir.1980), F.2d 280 original purchaser of a smooth-surface asbestos roof sustained damage to its roof and water damage to steel products mill, inside its and experienced electrical outages. It was not essential that the defective design of the roof caused damage beyond itself or whether the damage was expected inflicted; or abruptly the сonsumer’s ability to protect itself was the controlling interest. The plaintiff’s injury was considered an economic loss because it capable protecting itself through bargaining for a foregoing warranties in lieu of pur- a lower chase price. Furthermore, the Jones & Laughlin court opined, the extension of strict cover economic losses would effectively circumvent 2-316 of the Uniform Code; Commercial it would preclude the manufacturer from limiting his liability through disclaimers or limited warran- ties. Finally, recognition of Clark v. International Harvester (1978), 99 Idaho 581 P.2d 784 the court reasoned that the must judiciary recognize legislative acts in commercial law coordinate the development of tort law with statutory deference to sales law.

Obviously, foregoing intimates, as the discussion whether § 402A is applicable to injuries sustained the defective mercurial, issue. I unsettling legal is a view alone *19 proper- other damages sustained to the distinctions between itself, product to the defective damages and sustained ty sudden, and damage violent along with distinctions between perfunctory having rules damage, gradually-developing policies and correlation to the definitions little incredulous that the It is indeed law. and strict § frame defects on whether the depends 402A application to damage further physical to incur appellants here caused persons proper- or the property their other persons, their reason, Moreover, it is devoid of equally parties. of third ty § the cracks and fractures only 402A here where employ to and in calamitous fashion. suddenly frames occurred to the Commer- language of the Uniform peruse I to prefer § (2d) Torts to the Restatement of 402A of cial Code commercial statutory provision of the issue. No dispose extent, of products any application supplants, law little effort demanded it would have liability. Additionally, restrict specifically the Restatement to of the authors of before imposed must be property kinds of to which § Instead, only is made reference 402A is actuated. term such a why I no reason perceive “property” itself, regardless exclude the defective should is inflicted. how harm this Common- adopted by drafted and 402A was

Section injury the risk purpose placing for the wealth minimize loss. It most able expense upon party is a commercial party the injured not whether matters person is injured consumer or whether individual not it should Similarly, the manufacturer. with privity prod- is the damaged property matter whethеr product. the defective contacting uct itself or other on the statu- solely depend should applies 402A Whether is unrea- the defective whether limitations of tory in the engaged the seller is whether sonably dangerous, whether selling product, such business without reach the consumer fact to and does expected proximate is the the defect change and whether substantial cause of injury. applicability Its should not depend on the traditional distinctions tort and between contract law or the categorical rules discussed above.

I believe that cause of action appellants’ was properly law; therefore, products liability filed under I would hold summarily ‍‌​‌​‌‌​‌​​​​‌‌‌​‌‌​​​​​‌‌‌​‌​‌‌‌​‌‌​‌‌‌​​‌​​‌​​‌‍that it was error to dismiss their complaint due timely filing applicable to its within the six year limitations period. I

Accordingly, would reverse.

463 A.2d 1097 COMMONWEALTH of BEAVER, Appellant. Kenneth Superior Pennsylvania. Court of March

Submitted 1983. July Filed

Case Details

Case Name: Industrial Uniform Rental Co. v. International Harvester Co.
Court Name: Supreme Court of Pennsylvania
Date Published: Jul 15, 1983
Citation: 463 A.2d 1085
Docket Number: 2572
Court Abbreviation: Pa.
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