*1 Furthermore, Hence, spe claim, too, the form of the ment contract. that duplication must permitted cial verdict some be retried. damages. polym found that the jury Affirmed and remanded a new trial $500,000 process erization worth on consistent with this decision. 20,1977,
April had no value on October Having instructed that the damages of the for a violation securities
law is between the difference what the
claiming party parted with and what he
received, jury declared that Bond had $500,000 damages
sustained as a result Charlson’s violation Minnesota S.J. GROVES AND SONS during Securities the course of Law COMPANY, Plaintiff, negotiations leading up signing to the contends, April proposal. 20th Bond however, assignment that to Durance AEROSPATIALE HELICOPTER rights polymerization process of his in the CORPORATION, Defendant. constituted the consideration for lifetime No. C8-85-136. employment. Based an instruction that Supreme Court Minnesota. damages perma of a contract for breach employment only unpaid nent included not 20, 1985. Sept. wages any salary of future loss 8, 1985. Nov. Rehearing Denied earnings from October but also difference, any, if value of the Corporation stock of Durance from that
promised, jury determined that Bond damages $685,578
had sustained as a Combining
result of the breach. these two damages
measures of resulted in Bond’s not the benefit of the con performed
tract if fully it had been
($635,578) pro but also consideration he (the rights process,
vided valued at
$500,000) i.e., damages based on both — breach of contract rescission. Given findings that Durance had breached a April pro
contract memorialized 20th
posal and that there had been a violation of act,
the securities Bond was no doubt enti
tled to recover based on either
breach of contract rescission—but not
on both.
Finally, although the claim that
Charlson, shareholder, as the fiduciary obligations
breached his
minority separate shareholders is a cause action, claim instructions respect
with for breach of fidu
ciary obligation inextricably were interwov
en dependent upon with and jury’s de respect
termination employ-
Bolivia, operational it where became Au- gust 1977. April helicopter
On was returning involved in an accident while to having the Bolivia construction site after blasting powder delivered a load of to a camp base located in an area. inaccessible pilot killed, helicopter was was badly damaged. passenger injured A was the crash. In addition to survived dam- helicopter, to Groves lost the use of helicopter and suffered other incidental consequential damages, including proper- loss of a small amount of other ty high frequency aircraft radio and —a pilot two communication headsets which purchased separately Groves had helicopter. stalled in the Groves contends that the crash occurred helicopter. Spe- because of a defect cifically, alleges fatigue Groves component part failure of a in the collective Rockwell, Winthrop Timothy A. R. pitch mixing helicopter control unit of the Schupp, Minneapolis, for plaintiff. pilot’s ability eliminated the to control the Flaskamp, Minneapolis, William D. pitch of the rotor blades. Once the rotor defendant. pitch, blades lost their there no force aloft,
acting keep helicopter and it crashed. crash,
Following
the heirs of the
brought wrongful
against
death action
PETERSON, Justice.
Aerospatiale, alleging negligence and strict
This case involves a
certified to
liability. That action has been settled. On
by
this court
the Federal District Court of
11, 1984,
May
Groves commenced suit
Minnesota, arising out of an action involv- against Aerospatiale in United States Dis
helicopter purchased by
of a
crash
Court,
Minnesota,
trict
Fourth District of
Company
S.J.
Groves
Sons
seeking recovery
helicop
(Groves),
defendant, Aerospatiale
from
Hel-
ter,
use,
profits,
loss of
lost
and other
icopter Corporation (Aerospatiale).
consequential damages,
incidental and
un
1977, Groves,
May
major highway
warranty, negli
der theories of
breach
contractor,
government
gence,
liability. Aerospatiale
contracted with the
and strict
an
32-mile, asphalt-paved
of Bolivia to build a
swered that Groves’ breach of
highway,
highest
by
one of the
altitude road-
claim is
the statute of
barred
limitations
undertaken,
way
projects
construction
negligence
ever
and that Groves’
and strict lia
Cotapata,
bility
precluded by
La Paz to
Bolivia. Groves
claims are
this court’s
previously
Aerospatiale
had
ordered from
decision in
Siempel
Aerospatiale
helicopter,
(Minn. 1981).
an
kamp Corp.,
Lama
manufac-
1.) Thus, 336.2-719 § The crash allow was sudden and calam- unlimited event; liability tort in all itous commercial regardless transactions of contractual limi- 2.) The passen- was killed and a totally tation “would pro- emasculate these ger injured as a result of the U.C.C.,” visions of the circumventing legis- crash; lative intent. Id. at 162. On the other 3.) party making The the claim for eco- hand, strict in “developed tort nomic party loss is not the which suf- large part gaps to fill in the law of sales injury crash; fered the or death in the respect with purchasers,” id., to consumer gaps that exist because of contractual re- 4.) party making The the claim for eco- quirements privity notice, and, more nomic loss did suffer but a nominal importantly, because individual consumers damage amount of to other property. lack bargaining power accept- to avoid Answering question this certified unfairly contracts that limit their reme- delineating permissible volves overlap general dies. expressed Our rule as liability, negligence, strict and breach of Superwood arose out of our conclusion warranty, an issue we first addressed in “[ljimiting that application of strict Superwood,1 Superwood purchased a hot products liability to consumers’ actions or plate press manufactured Siempelkamp involving personal actions injury will allow and used it years, without incident for 21 satisfy U.C.C. to the needs of the com- cylinder until the failed and could not be mercial sector legit- and still repaired. Seeking recovery profits of lost expectations imate of consumers.” Id. damage press, brought an action based negligence, As we in Superwood, indicated products liability, strict breach of warran- long as an individual seeks economic losses ty, and breach of contract. We held that personal injury out of damage or Superwood’s lay solely remedies in con- property, recovery lies outside the tract, tort, stating not in general rule warranty accordingly realm of the loss that “economic losses that arise out of com- compensible are es tort. See also Star transactions, mercial except those involving Co., Furniture Co. v. Pulaski Furniture personal injury proper- (W.Va.1982); 297 S.E.2d 857-59 Cloud ty, are not recoverable under the tort theo- Co., v. Kit Manufacturing 563 P.2d negligence products ries of or strict liabili- (Alaska 1977); Shields Morton ty.” Id. at 162. Co., Chemical Idaho 518 P.2d (1974). case, however, public policy objectives rationale and underlying general arise, although personal injuries rule as we arose from the occurrence, in Superwood, seeking out of a basic same Groves is eco principle: tort arising only law the Uniform nomic loss Com- itself, mercial Code serve distinct purposes, personal inju- not from the * * 1. It should be noted products provision that the contract between ance of Seller’s This parties stating contains a clause that warran- is not mentioned in the certified or the ty provisions are "in lieu of all liabilities or facts, statement of relevant nor is the contract a obligations damages including, Seller Thus, part of the record submitted to us. to, consequential damages, not limited all all provision upon issue of what effect this has loss, damage, expense arising out of or in recovery Groves’ in tort is not before us. use, use, perform- connection loss of recovery ry.2 spect seeks is for the him What Groves a risk that was allocated to product’s up to Groves’ ex- contract, failure to live he in effect asks the law to pectations suitability, quality, as to its bargain pur- accord him a better than he performance if a tort arose chased. —even occurrence, out of the same Groves did not Groves, When the like is a com- it, purchased. suffer but lost what it entity mercial endowed with type This defective —to power, any considerations of fairness and ordinarily itself—is not might deterrence that in other situations product’s unsatisfactory in tort because lead us to allow in tort for these performance problem types have no effect. designed law U.C.C. were urges Groves that it should be allowed remedy. tort to the defective Moreover, policy there are no reasons product itself, notwithstanding its status as *4 compelling recovery us to allow additional a commercial because the conflict ques in It is clear that this certified between tort and contract should be re tion comes to us in the context of a com by distinguishing solved between losses re plaintiff mercial with economic sulting “qualitative from a defect” and substantially equivalent power to that of resulting those from a “sudden and calam such, oppor the seller. As Groves had the occurrence,” regardless itous tunity bargain product’s to both as to the plaintiff. or the status of the For specifications and as to the risk of loss distinction, adopting courts the line power negotiate from defects it. This purposes for drawn for dam bargained means that Groves could have product typically to the defective itself warranty protection for more extensive damage resulting merely falls between consequently any coverage failure of is at deterioration, breakage, from de “gaps” not to in consumer reme tributable preciation, expecta or failure to live but, dies that tort remedies should correct tions and that is “sudden and ca rather, plaintiff’s conscious choice. lamitous,” resulting from a violent or haz Appeals As the Fourth Circuit Court of ardous accident. See Sanco Inc. v. Ford noted Purvis v. Energy Consolidated Co., (S.D.Ind.1984); F.Supp. Motor 579 893 Co., 217, (4th Products 674 F.2d 221 Cir. Pennsylvania see also 1982) Glass Sand (footnotes omitted): Co., Caterpillar 1165, v. Tractor 652 F.2d buyer commercial can him- [T]he 1169-70, (3rd Cir.1981); 1173 Moorman by negotiation. self He can induce the Co., Manufacturing Co. v. National Tank accept, price, seller to for a risks which 69, 81, 746, 752, 91 Ill.2d 61 Ill.Dec. 435 buyer efficiently cannot bear himself. 443, (1982); N.E.2d 449 Industrial Uni Conversely, by relieving the seller of re- Co., Rental Inc. v. International sponsibility product defects, for the com- form Co., Pa.Super. Harvester 317 463 buyer likely mercial is to obtain the 1085, (1983); price. A.2d 1089-91 buyer uct at a lower When a Bland & Wat who son, advantage opportunity Property Damage by has taken of that Caused Defec products liability invokes strict re- tive Products: Losses are What Recovera relatively 2. The indicates certified that in addi because of minor to "other personal injury, property" policy implications tion to a "nominal amount” of “would thwart the property damaged. Specifically, Superwood," Minneapolis Society Fine Arts Architects, Inc., Groves claims that small amount of other "[a] Parker-Klein Associates 354 property damaged (Minn. 1984), destroyed although was also N.W.2d 820 n. 4 crash, including high frequency a aircraft radio the record does not indicate the relative value of headsets, property," and two communication all of the “other Groves admits it is a purchased separately by presumably had which SJ. “small amount” and as such is in by bootstrap Groves and installed helicopter S.J. Groves after the sufficient to Groves' claims for tort by also, Aerospatiale." recovery damages. was delivered We of all of its See North previously party have that to allow a ern States Power Co. v. International Tel. & Tel. (D.Minn.1982). Corp., F.Supp. to sue in tort to recover substantial 550 111 ble?, (1984). Note, product itself, 9 Wm. Mitchell L.Rev. defective caused to Liability Economic Loss Products Ju or not considered as sudden calam- risprudence, Colum.L.Rev. 918 itous. (1966). “violent distinc This occurrence” accordingly We answer the certified (Second) tion stems Restatement question in negative. (1965), provides Torts 402A which § recovery physical harm caused COYNE,J., took no in the considera- “product in a defective condition unreason tion decision of this consumer,” case. ably dangerous to the user or turns on resolution “whether safe SCOTT, (dissenting). Justice ty-insurance policy expec of tort law or the tation-bargain protection policy of warran I respectfully majority dissent. The mis- ty applicable particular law is most to a interprets Superwood. Superwood allows Glass, Pennsylvania claim.” F.2d at recovery economic losses arise out Accordingly, damage of commercial “involving per- transactions “qualitative itself caused defect” is sonal property.” only under the U.C.C. con language reads pre- tract whereas in tort is al damages, vent types those lowed cases involving even in “sudden calam- from a “sudden calamitous occur holding puts itous events.” Such a Min- rence.” very minority. nesota much in Super-
This “sudden
calamitous” distinction wood never intended such result.
a
itself
some
causes us
concern. “Calam-
interpreted
Superwood should be
to al-
word,
itous” is a
incapable
nebulous
of
“accident-type”
for
low
certain
precise
Determining
definition.
whether
juries.
example,
For
in Mid Continent
damage
from a
resulted
“sudden
ca-
County
v. Curry
Spraying
Aircraft
opposed
“qua-
lamitous occurrence” as
ato
Inc.,
(Texas
Service,
1978),
We need not determine here whether damages,
such under certain circum- existing,
stances not here will ever be passing, we note
that other courts have focused not on has occurred “other REED, Respondent, K. Carmen property,” but instead on the nature of the defect and the manner in which the * * * CONTINENTAL WESTERN damage occurred. Where the dam- COMPANY, INSURANCE deterioration, results from Petitioner, Appellant. breakage, depreciation, or failure to live expectation, these courts would No. C0-84-881. recovery only allow on a contract or war- Supreme Court of Minnesota. ranty theory. Where the results from hazardous conditions or a sudden Sept. occurrence, however, and calamitous these courts would allow under theory.
a tort Their rationale for this imposes
distinction is that tort duty law produce manufacturers to safe