*1 INSURANCE, CONTINENTAL Fireman’s Company;

Fund Insurance St. Paul In- Company; Royal

surance Insurance

Company; Centennial Insurance Com-

pany; and American Home Insurance

Company, Appellants (Plaintiffs), COMPANY,

PAGE ENGINEERING I-X, inclusive, Appellees

Does

(Defendants).

No. 87-295.

Supreme Wyoming. Court of

Dec. *2 Insurance, Fund Insur-

tinental Fireman’s Compa- Company, ance St. Paul Insurance ny, Royal Company, Insurance Centennial and American Home Company, Insurance Company collectively (Appellants Insurance Continental) referred to as failed to state asserting negligence, claim those counts against liability, strict or failure to warn Page Engineering (Page) because damages asserted were the economic loss Bridger (Bridger), buyer Coal product. respect With to contractual asserted, claims that were the trial court ambiguous found that the contract was not Page’s expired long that duties before addition, any cause of action accrued. the district court ruled that Continental respect pay- was a volunteer with to its Bridger’s ment of insurance claim. We correctly hold that the trial court ruled that negligence, Continental’s claims of strict Horn, Jr., Cheyenne, Vincent J. and Lar- liability, and failure to warn do not state a Henson, Henson, ry D. Henson & San upon granted. claim which relief can be Francisco, Cal., appellants. for We are in accord with the district court’s ruling Page existing duty had no un- Gary Greenhalgh, Greenhalgh, M. Bus- Bridger’s der the contract that related to sart, Rosetti, Springs, West & Rock loss in this case. Given those determina- Anderson, Shaw, Seyfarth, John H. Fair- tions, question of whether Continental Geraldson, Ill., Chicago, ap- weather & for paying Bridger’s acted as a volunteer in pellees. moot, claims for insurance is and we need it. affirm address We the trial court’s CARDINE, C.J., THOMAS, Before entry summary judgment in favor of URBIGKIT, MACY, JJ., that, substance, Page, recognizing BROWN, J., Retired.

judgment prej- constituted a dismissal with THOMAS, udice of the claims for relief under tort Justice. summary theories and was a true judgment The essential determination that respect upon to claims based breach court must make this case is whether express implied of an contract. may by purchas- tort theories be invoked This case arose out of the failure of a er of a in an instance in which the reeving very large on dragline block damage only failure of the causes Bridger purchased Page. had A (economic that failed loss reeving in the block break caused the 100 authorities). parlance of the An addi- yard long separate boom to from the rest questioning propri- tional issue is raised and, fell, dragline of the structure when it ety entry summary judgment of a destroyed. paid Continental boom buyer favor of the seller when the asserts Bridger damages, its which were genuine that a of material fact exists issue collapse dragline, caused concerning the contractual duties owed sought Page then to recover from assert- buyer. parties the seller to the also subrogee ing rights Bridger. as a argued applicability have of the law relating company acting Brief, to an insurance Appellants’ In the Continental sets addressed, payment a volunteer in the primary the claim forth five issues to be buyer. proceeds encompasses insurance filed each of which several sub-is- arguments. as: complaint trial court ruled that the of Con- sues and Those are stated treating preme controlling “A. a district court in Court and is the law in Whether Wyoming majority jurisdictions, Rules of Civil Procedure a clear to enter 12(B)(6) Rule motion to as a sum- summary judgment appellee ap- dismiss mary judgment I, II, IV-VI) motion make factual pellants' (Counts claims *3 loss, assumptions type as to cause only which seek to recover for loss to the loss, coverage and insurance dragline for boom? loss; deny plaintiff right to conduct any finding “II. Whether of fact was discovery; grant further and then sum- necessary to the district court’s award of mary judgment to defendant on the basis summary judgment appellee for as a loss, type of the assumed cause of matter of law? loss, coverage? and insurance recognize “III. Whether the courts “B. Whether a manufacturer who sells exception approved by to the doctrine heavy machinery in Wyoming and later Supreme United States Court in the East component discovers that one of said ma- denying River decision recovery for eco- chinery unreasonably has a correctable itself) (damage nomic loss to the dangerous may escape liability defect for component failure of one of a ‘negligent failure to warn’ under the ‘ec- product damages component? another danger- onomic loss’ doctrine when the “IV. Whether the economic loss doc- ously component defective fails in a fore- trine liability bars strict claims for dam- destroys seeable manner and a non-de- age to the itself? component machinery? fective “V. Whether the economic loss doctrine “C. Whether the ‘economicloss’ limita- negligent bars claims for failure to product liability tion on actions should warn? entirely preclude product liability a ac- “VI. properly Whether the trial court tion which sounds in or strict summary judgment appellee awarded for unreasonably danger- where an appellants’ claim for of con- breach component ous defective of a tract for failure to maintain insurance fails in a foreseeable manner and de- (Count III), negligent failure to maintain stroys component? a now-defective (Count IV) express insurance and indem- may “D. Whether the district court (Count V) nity where the clear and unam- assumptions make factual as to cause of biguous language agreement, of the 1974 summary loss and based thereon enter by appellants contract relied on judgment that the loss was not covered record, provides appellee’s in the by insurance and thus that insurers are Bridger lapsed duties to under the 1974 subrogation? not entitled to agreement eight years before the col- “E. any continuing obligation Whether lapse dragline? implied should under a contract be for properly “VII. Whether the trial court where, heavy machinery sale of after the appellants’ denied motion for continuance sale, the manufacturer continues to con- discovery appellants only where technical, training duct and assistance sought discovery of facts to establish and, jobsite; visits to the if there is no theory their of failure to warn and the obligation, continuing such whether dis- already theory trial court had found this covery should be allowed to ascertain the legally insufficient? obligations requirements and understood properly the trial “VIII. Whether court imposed by the manufacturer or in- summary judgment appellee awarded dustry practice custom as to the appellants were not entitled to because subsequent jobsite?” visits to the subrogation appellants admitted since Page Engineering, Appel- Brief its dragline due to a that the loss to the lee, presented way: states issues this dragline latent defect properly ap-

“I. Whether the trial court for loss due to a latent defect was ex- doctrine, plied coverage appellants’ the economic loss cluded from under which approval by Wyoming policy.” cited insurance with Su- negotiations Bridger commenced be In the made. event that Page with purchase dragline, to be Equipment component parts or any are pit used in open mining operations pursuant replaced warranty, such Wyoming, Page would manufacture. replacement Equipment parts shall negotiations Those culminated in a Pur- provid- warranted guaranteed be as chase Contract demonstrates care- (1) period herein for year ed one fully negotiated prepared agreement replacement such acceptance after parties respect responsibili- by Buyer. The thereof Seller shall not buyer ties of both the and the seller. That any damages liable hereunder provided integration Purchase Contract in paragraph defined and excluded 6.0 clause, with merger which stated: [relating consequential this contract *4 Contract, including “This Purchase these special damages] nor shall Seller re- be conditions, specifications terms and the sponsible under breach any of this war- any attached and hereto additional terms ranty any any for injury person proxi- to incorporated and conditions in and at- mately resulting from the breach of this tached hereto constitutes sole the and warranty. THIS WARRANTY IS THE agreement parties. entire between the ONLY WARRANTY MADE AND proposal Seller’s is incorporated in THERE ARE OTHER NO WARRAN- and part made a of this Purchase Con- GUARANTEES, TIES OR EXPRESSED only tract extent specifying of the IMPLIED, OR INCLUDING MER- description nature Equipment and of the CHANTABILITY OR FITNESS FOR ordered, and then to the extent that PARTICULAR USE.” such terms are consistent with the terms The contractual duties Continental of this Purchase Contract. No other were performed by Page contends not are items or binding upon conditions shall be in paragraphs eighteen, nineteen, found Buyer accepted by writing.” unless it in twenty and of the Purchase Contract. Ac- In paragraph purchase agree- ten of the cording eighteen, to paragraph Page would ment, Page’s warranty dragline was during erection, furnish consultants the set language: forth in this was defined to terminate when the “Seller warrants that the Equipment and dragline operable, became period and for a parts all thereof shall be from free de- days sixty excess of after completion material, fects in design, workmanship of erection dragline. the of para- In title, and and shall conform all re- graph nineteen, Page agreed to “continu- spects to the terms of this Purchase Con- ously carry” dragline insurance on the tract, and, quality specified, if no shall the amount of one million pro- dollars “to be quality of the best consistent with the against tect and by from all loss of reason type equipment nature and of usual and persons injury or draglines. customary for If within one including employees Seller’s own and third (1) year (a) equip- from the date that the persons, and property Buyer and third ment opera- for available commercial parties, upon arising based or out of Sell- (capable overburden) tion stripping or (b) operations er’s including hereunder thirty (30) days op- after date erations of his walks, subcontractors or dragline earlier, sub-sub- first whichever is thereof, paragraph twenty, contractors.” Equipment, any part Page or does agreed that it warranties, indemnify Bridger would not conform to these and “damage Buyer to or destruction of property” shall have notified the with- Seller Bridger’s from, “resulting arising in a discovery reasonable time after its out of, in any way of such nonconformity, connected with Seller shall there- Seller’s upon operations job site, promptly correct such hereunder at the nonconformi- ex- ty expense. cepting only its injury may at sole such or harm as conditions be any subsequent solely mutually by tests shall be caused the fault or agreed officers, upon directors, Seller Buyer, employees shall be notified may represented be all agents.” tests with, performance Bridger requested Page person- In accordance to send of, Contract, inspect dragline, nel to the mine site to Page the Purchase delivered Page completing did that. After dragline Bridger placed inspection, Page Bridger sent a letter operation by March of 1978. While words Page’s findings which related and recom- may inadequate gigantic be to describe this mendations. The letter includes advice machine, some idea of its size and function Page Bridger many problems gleaned can Page’s be brief. It is improper were attributable use and explained there that: dragline. maintenance of the Specifically “* * * dragline has a boom 100 respect cracking reeving yards long suspended from which is a block, Page suggested that those cracks be capable holding bucket 50 to 75 cubic properly. welded There is no claim yards scoops up of material. The bucket Page responsible Continental that dragged along material as it accomplishing any suggested of these cor- ground. The bucket is then lifted rections, and there is no allega- evidence or dragline, including boom and the entire tion Page performed any sug- boom, housing then turns so that gested repairs Bridger.

the contents of the bucket month, In the same Page March of *5 dropped spoil pile. dragline into a company engineers instructed its design to original then turns to position, back reeving a block model that support would a the dropped dragged again, bucket is greater Page stress load. Officers of stat- procedure repeated. and the ed that this was sheer coincidence because dragline position by is moved to a new requested the modifications were in re- ‘walking’ large legs on attached to its sponse purchase to a order for dragline a sides. required that would greater to tolerate stress conditions than draglines those of reeving large ‘pul- “The block is a steel sold, previously manufactured and includ- ley’ through pass which steel cables ing dragline Bridger. the furnished to Sev- dragline housing. a mast to the Other changes eral structural were made in the tip lines run from the mast to the of the design reeving permitted of the block that support Engines boom to the boom. the to apply straight pull boom on the housing the are used to raise the boom design load. The new employed also during by tightening erection the lines steel, gauge thicker providing greater pass through reeving the block. “impact properties in cold weather.” Con- boom, After erection of the static lines tinental, action, alleged in this that the reeving are attached to the sides of the redesign developed a more durable posi- block to hold the mast and boom in block, reeving well, but a safer one as tion.” Bridger Continental claims that should dragline by Bridger This was used in its availability. have told of its been It is mining operations, any apparent without Page clear that any did not advise of its complaints, from 1978 until March of 1983. prior purchasers redesign of the of the Bridger Page prob- Then notified of several block, reeving nor did it recommend to experiencing should, could, lems that it was with the ma- Bridger replace that it or the reeving complaints Bridger’s dragline chine. block on One of those related to redesigned the model. reeving Bridger block. had noticed cracking part dragline. some in that of the 24, 1986, February reeving On block brief, According Bridger to Continental’s Bridger dragline broke one cracking had observed the earlier and had previously cracks. welded Continental al- supports only welded it. The record a ref- leged reeving that the in the break block Page Bridger erence in a letter from to separate caused the to from the boom hous- referring by Bridger to a notification to ing dragline resulting of the in destruction Page cracking reeving damages block of the boom with in excess of $2,500,000. learning collapse letter dated March After of the Bridger dragline, Page unreasonably notified other created an fect purchasers draglines they addition, of its should dangerous that condition. Conti- “super-structure system” their inspect Page’s that contractual nental contended possible cracking. re- purchasers Several beyond warranty peri- duties extended sponded they cracking that had observed Bridg- inod the Purchase Contract so that reeving draglines. blocks on their policy er’s claim was covered response was to Page’s to that advice rec- that, alternative, had in the Continental companies they re- ommend those paid Bridger’s good believing claim in faith place reeving reeving their blocks with the that the claim was covered. Continental designed block model in 1983. right asserted therefore that it did have a subrogation Bridger claim could boom After destruction of the on its brought against Page. have Continental dragline, Bridger filed a claim with Conti- also filed Motion for Leave File for the had nental it suffered. claim, Supplemental Complaint paid Amended and Bridger’s Continental and it complaint seeking complaint by supple- then filed its district amend its court seeking Page any menting to recover from to include an additional cause of Bridger cause of action that could products have action for strict liability. brought against Page ground on the court then to the district furnished subrogated Bridger’s Continental parties letter in a decision court complaint claims. Continental’s set forth stated that it intended to treat the Motion claims for recovery five that included theo- by Page filed Dismiss as a motion for negligent design reeving ries summary judgment and that it would allow block, negligent Bridger failure to warn two approve Continental weeks to either block, redesign reeving breach of object proposed court’s action. contract for failure to maintain insurance *6 objection, Continental did not file an but it dragline, negligent on the to main- failure did file a Motion for Dis- Continuance of insurance, express tain and indemnifica- covery in which it was asserted that addi- Page tion. answered Continental’s com- necessary develop tional time was to its Page plaint, began to Continental argument Page that strictly should be held pursue discovery. in due liable tort to the dan- unreasonably later, Approximately year July one on gerous by condition created the defect 1987, Page filed a Motion Dismiss and to to reeving the block. After brief- additional Stay Proceedings Disposition Pending of ing, deny- the trial court entered an order Motion, pursuant 12(b)(6), This to Rule ing Continental’s motion for dis- additional W.R.C.P., (1) asserting that an action in covery time and its motion to amend the only to recover tort economic loss fails to complaint to add an additional claim of action; (2) a any state cause of contractual product liability. strict The court en- then Page might respon- which duties have been Summary Judgment tered a Page for sible under the 1974 had contract ended respect pending all to claims. eight years collapse at least before the of Initially, Continental asserts that the dis- Bridger (3) dragline; the Continental granting judg- trict erred in summary court making payment a volunteer in was its to ment of the genuine because existence of Bridger, thereby any preventing claim of relating issues of material fact to the cause right subrogation to a Continental of be- Bridger’s damages. quotes Continental policy the cause which Continental had language from the decision of the district Bridger type written for did not cover suggests finding court that a dam- damage experienced dragline. that the by the block, age reeving then which in turn Opposition Continental filed an to De- collapse boom, Motion caused the of the a fendant’s to Dismiss which it was argued gradual that by the economic doctrine did deterioration caused a latent loss apply to a alleged cause of action defect. It Continental’s that which contention finding prejudicial a failure warn or to of action such a sev- cause because alleged distinguished the de- have which because eral courts between The concern policy justifications. by gradual deterioration solid caused products has law the area catastrophic caused a event and those purchas protect on need to focused policy its insurance ex- and also because consumer, not in er or who often is patent cluded latent but not defects. Con- position impact if to withstand the financial argument by urging its tinental continues he, property, damaged by his a defec or by the dis- that the error was exacerbated spread need product. social tive its to continue trict court’s denial of motion resulting, catastrophic, and often losses develop permit it to facts discovery to thus spectrum of consumers in across showing dragline of the is, creasing the cost of the how gradual was not due to deterioration but ever, inju substantially lessened when the was, instead, catastrophic event. ry is to the itself. Further case, prior In a we reversed the decision more, essentially this kind of loss relates granting summary district court bargain purchaser’s benefit judgment prematurely denying reason- has made himself and been between parties time for the to conduct their able recognize the seller. authorities discovery. Hadley, 742 desired Pace v. the law of is far better suited to contracts (Wyo.1987). P.2d It was clear in Pace part deal with the dissatisfaction that the decision of the trial court to con- a purchaser under such circumstances. motion to dismiss into vert the defendant’s law, warranty law “Contract summary judgment, a motion for a without particular, is well suited commercial giving parties sufficient notice of the sort involved controversies allowing opportunity without a reasonable parties may case because the set the discovery, in prejudice resulted agreements. terms of their own rights parties. We not retreat do can liability, manufacturer restrict from, diminish, the stance we took in limits, disclaiming within warranties recognize Pace. continue to neces- We limiting 2- remedies. U.C.C. §§ sity affording adequate time for parties exchange, purchaser 2-719. summary discovery before a motion for product. less Since a com pays judgment may granted. The difference generally mercial situation does not in that, in this of the rule of case because pow large disparities bargaining volve court, law followed the district we *7 er, cf. Henningsen v. Mo Bloomfield opportunity espouse, affording an for addi- 358, 161 tors, Inc., (1960), N.J. A.2d 69 32 discovery be an exercise in tional would into we see no reason to intrude futility only to increase and would serve parties’ of the risk.” East allocation parties. expense litigation to the River, 873, 106 at 2303. 476 U.S. S.Ct. addition, are accord we with those recognized rule majority is that that have concluded is unwise to (the courts pure damage a claim for economic loss intrude, into justification, more without product) does not lie to the defective have legislatures chosen and remedies that liability. theory on a or strict provided by adoption have been Corp. v. Transamerica East River S.S. of Article 2 of the Uniform Commercial 2295, Inc., 858, Delaval, 106 S.Ct. 476 U.S. through 34-21-201 Code—Sales. Sections (1986); Compa L.Ed.2d 865 Aloe Coal 90 34-21-299.5, See W.S. 1977. Sacramento ny Equipment Company, 816 v. Clark v. Regional Transit District Grumman Cir.1987), (3d denied 484 F.2d 110 cert. Cal.App.3d Flxible, Cal.Rptr. 158 204 156; L.Ed.2d 111 U.S. 108 S.Ct. 98 Dist., 1984); Clark v. Inter- (Cal.App. 3 (1987); Company v. Engineering Hart Company, 99 Idaho Harvester national (D.R. F.Supp. Corporation, FMC (1978). 581 P.2d I.1984); Distributors, Inc. Spring Motors argues vigorously that this Company, 98 N.J. v. Ford Motor Continental rule, Bell, (1985). espouse majority Buckley also should not A.2d 660 court should, instead, adopt the rationale of (recognizing the (Wyo.1985) 703 P.2d 1089 permit recovery of eco- rule). that rule on those courts majority This is founded nomic damage product ultimately to the adopted rule in Pennsylvania itself when the Aloe, however, caused a would be consistent. In sudden, calamitous event that creates an that, court by applying determined the con- unreasonably dangerous condition. Those River, cepts of murky trudge East “a courts recognized which have a distinction through sophisticated gives way nuances gradual between loss caused by deteriora flight Aloe, an unencumbered to basics.” sudden, tion and loss caused cata 816 F.2d at 119. The court then held that strophic producing event unreasonably an principles could not be invoked dangerous generally condition relate the only damage was harm to the defective latter being situation as prop more akin to product. See also Wisconsin Power & erty than to damage. economic See Penn Light Company Westinghouse Electric sylvania Corporation Glass Sand v. Cat Corp., 645 F.Supp. (W.D.Wis.1986). erpillar Tractor Company, 652 F.2d 1165 treatise, In his Professor Keeton also ad- (1981); Association, Kodiak Electric Inc. against adoption vises of a rule that Turbine, Inc., Delaval 694 P.2d 150 attempts distinguish “accidental” dam- (Alaska 1984), reh. denied 696 P.2d 665 age product to a pure from the economic (1985); Arrow Leasing Corporation v. loss: Diesel, Inc., Cummins Arizona 136 Ariz. “Making liability depend upon whether (1983); Hills, P.2d 544 Roxalana or not the loss results from an ‘accident’ Ltd. v. Masonite Corp., F.Supp. creates a difficult issue arguably an (S.D.W.Va.1986), 813 F.2d 1228 aff'd irrelevant respect issue with to the validi- Supreme States, Court of the United ty provisions of contract allocating a risk opinion, a unanimous found such a distinc of loss for harm to the defective tion not persuasive: to be itself purchaser. to the Distinguishing “* * * We realize that the damage may ‘accidental’ qualitative, occurring through gradual mere economic loss is many difficult in deterioration or internal breakage. Or it cases, such as defect in component of a may be calamitous. But ei- [Citations]. television tubes, set burns out the way, ther since definition person no an electric engine connection to the of a other property damaged, resulting refrigerator destroys engine.” purely loss is economic. Even when the Keeton, W. Prosser and Keeton on the harm to the itself through occurs Law (5th Torts 101 at 709 ed. § abrupt, event, accident-like the result- 1984). ing repair costs, loss due to decreased Furthermore, drawing a value, distinction be- profits and lost is essentially the sudden, tween a calamitous grad- event and purchaser failure of the to recover the ual deterioration simply turn on the benefit of its bargain traditionally the — arbitrary purchaser factor whether core concern of contract law. See E. gradual noticed Farnsworth, deterioration of 12.8, a com- Contracts *8 pp. Section ponent that, part (1982).” unattended, left River, could East 476 U.S. at result in a calamitous S.Ct. at 2301. occurrence. This difficulty in was noted S.J. Groves & Sons After Supreme Court articulated its Company Aerospatiale v. Helicopter Cor- issue, resolution of this the United States poration, 374 (Minn.1985). N.W.2d 431 Appeals Court of for the Third Circuit reex- quarrel amined the We have wisdom of its no with decision in Penn- Continental’s sylvania, in which that contention that court had held fhat there be no incentive principles produce could be invoked in an manufacturers to prod- action safer seeking recovery damage ucts they to the unless are held defec- liable for those equipment tive products when the placed defect resulted in defective in the hands of a hazardous flowing purchasers condition and the loss and consumers. We are satis- from the fied, defect was caused been, accident as other courts have that rules that was a catastrophic sudden and event. permit recovery case, In that predicted the court that strict damage other expenses. The ing repair revenue and personal inju- itself or for product than the recovery for the economic permitted function. court ry adequately serve this social warranty beyond provided in the Company, loss that Caterpillar Tractor Ogle v. See negligent failure to invoking theory v. (Wyo.1986); P.2d 334 O’Donnell Appeals The 11th Circuit Court (Wyo.1985); P.2d 1278 warn. City Casper, 696 rule, Donahue, denies general 674 ruled that the v. Caterpillar Tractor Co. pro- beyond loss that recovery in accord for economic (Wyo.1983). We are P.2d 1276 premised warranty, was rejected the vided for those courts that have upon policy a different from that invoked circumstances which distinction between to warn: alleged itself the tort is failure damage product to the when demonstrate “* * * and the same by a calamitous event caused product’s dutyA to warn of a gradual deterioration. economic loss due to aware defect of which the seller becomes quality product goes not to the Wyoming that does We therefore hold bargain, buyer expects that the from the liability or permit recovery in strict type of tort law but to the conduct which damage prod- caused to the negligence for public governs as a matter of social and corollary of this rule uct itself. 613; Prosser, 92, p. policy. Section that, summary judgment context of Third, (Gee, F.2d at Jig the permitted, where no cause of action J., dissenting). To hold otherwise would In obviously no material facts. there are impermissibly a manufacturer who allow discovery, if there are no the context of that it has a defective aware material, purpose are no can be facts which on the market to hide behind its warran- discovery. served further ty buyer unknowingly uses it.” while alternative, ar In the Continental Miller, 733 F.2d at 818. permitted gues recovery should be McConnell, F.Supp. a sim- alleged tort is the failure to warn when the A situation was involved. defective ilar foreseeable, known, unreasonably engine of a placed crankshaft was refers us dangerous condition. Continental being fishing engine was vessel while was allowed to two cases which repaired. That defect resulted theory negligent failure to warn on costs, towing of salaries engine, loss was to paid. revenues The dis- paid, and loss of are Industries itself. Those cases Miller instance, court, adopted the in that trict F.2d Caterpillar Company, 733 Tractor reasoning and concluded that re- of Miller (11th Cir.1984), reh. 81 A.L.R.Fed. 163 should be covery for the economic loss (1984), 738 F.2d 451 and McConnell denied a known for failure to warn of allowed Company, Caterpillar Tractor placed the market. in a defect Miller, (D.N.J.1986). In F.Supp. 1520 Cat is different from those because engine, This case erpillar and sold an manufactured single that was dealers, it manufacturer company to a involves through one of its integrated prod- single, fishing responsible for to construct a that had contracted uct, though up made of several en even was After the for Miller Industries. vessel Concrete, Industries, Fordyce Inc. components. Cf. to Miller gine had been sold Inc., Trucks, F.Supp. 118 of Mack the model Caterpillar discovered (D.Kan.1982)(damage mixer that was to a a de sold contained engine that had been truck chassis of a inopera attached to the engine that could render *9 fect property). While those damage to other warning to its Caterpillar sent letters ble. distinguishable, we rest factually the cases are advising of the defect and them dealers argument Continental’s rejection of correcting No letter was our for it. procedure proposition that recov- squarely upon the purchased company that had to the sent should not be Industries, pure economic loss pur ery for the engine or to Miller the alleged is failure the tort engine permitted when vessel which chaser of the to the Recognizing the conclusion to warn. that the What followed was was installed. Miller, perceive that both contrary in we causing a loss of fish- engine failed at sea styles way, adoption of tort concern the conduct of the theory of the tort of failure manufacturer, may albeit that conduct oc- simply permit damaged would warn cur at different times connection with party through to reach a rear door that Certainly, the manufacturer’s business. sanctuary from which he is foreclosed may argued that the manufacturer who bar on the main entrance. intentionally, negligently, or fails to warn example This case is a classic of a product known defect in a that has proposition expectancies respect that with placed been culpable on the market is more performance to the of a should be rejection for his actions. The a matter of parties. contract between the pure economic loss under theories of purchaser If a desires to extend the war- liability, however, and strict has ranty period, or obtain some form of insur- culpa- been because of the absence of reliability ance as to the or worthiness of bility, policy but because of the that eco- product, that through be done adjusted by nomic loss is better contract bargaining for an warranty extended at an principles. rules than tort What is true by payment premiums increased cost or respect with negli- strict for insurance. Bridger decided to obtain gence, i.e. the risk prod- associated with a insurance from Continental to cover certain uct which expectations does not meet the dragline defects beyond protec- buyer of a is a risk better suited to resolu- tion furnished in warranty provision by agreement tion sophisticated between Page. its contract with As consideration parties bargaining rather shifting than for that coverage, accepted Continental through economic burden principles, premium payments in accordance with its respect also is true with to the tort of policy. obtain, insurance That decision to Keeton, failure to warn. See W. Prosser provide, additional through insurance Torts, and Keeton on the Law 101 at § arrangements represents contractual expectancies business parties of each of the Recognition of a cause of action based respect prod- worthiness of the upon warn, circumstances, these injection uct. The principles of tort into impose duty well could on the manufac the resolution bargain, of that any without turer to advise each every customer of compellingjustification so, doing serves change design that, in the of its only to obfuscate the decision making pro- way, might some lengthen the useful life of sophisticated cess which entities conduct product. that appear There does not to be their business. We hold that the district any inherent in imposing wisdom such a court did not err in dismissing, by entry duty. considered, We also have reject summary judgment, Continental’s claims ed, adoption any distinction based alleging right to recover economic dam- upon whether the defect could create an tort, ages in including theory of failure unreasonably dangerous Impos condition. to warn. ing liability damages caused to the user Continental seeks upon reversal also consumer or to other property ample right perceived to recover under contractu- encourage incentive to manufacturers to obligations al by Page. owed It dangerous warn of a contends they defect of which are, present there are be, genu- the record or should permit aware. To recov ine issues of ery in material fact which the instance in foreclose which the entry summary judgment only simply itself with re- because the spect plaintiff to contract alleged specifically, has claims. More failure to warn of the argues purchase defect Continental encourage plaintiffs will present products agreement liability argument continuing “a established a obli- gation part Page clothed in ‘failure on the language,” to warn’ to insure the for nothing poten dragline indemnify more than Bridger against its settlement Zidell, tial. Cargo, Alternatively, Inc. v. loss. Freight urges Continental Subfreight Barge F.Supp. that, proposition ZPC if there was no con- *10 of (W.D.Wash.1987). contract, tinuing obligation Stated another under the the ignores provision totally the Page inspecting that subsequent actions of defects, request at of dragline the for the and the context in rest of the contract implied an contract be- Bridger, created which it is made.” Bridger Page. tween reading of of an The assertion an absurd interpre is

The rule clear that the unambiguous support to claim contract a unambiguous presents an tation of contract ambiguity of justify not a conclusion does court, question of simply a law the require deny in the contract nor a court to disposition disputes relating to a of such summary judgment genuine because accomplished by properly may contract be fact exists as to a question of material summary judgment. See State Penn the owed under contract. (Wyo.1988). Company, zoil 752 P.2d 975 urges Insofar as Continental an ambiguity pur an existence of Bridger implied Page contract between if agreement supported only can chase beyond period that extended the language any is removed from contextual express agreement, Continental admits reading agree the background. The of agreement the are that terms of such an that chooses would im ment Continental parties. simply either the It unknown to of Page carry pose part duties on the of suggests jury that a be allowed decide indemnify Bridger insurance and loss, despite express infinitum, ad the the terms It an axiom of the what were. is promulgated in the clearly time limitations that, of absence of a law contracts the agreement. The established rule does minds, meeting the there is no of contract. but, instead, support requires Continental Thus, in instance in which the terms of be read as a whole. See that the contract contract are uncertain that mutuali the so (Wyo.1986). Moncrief, 720 P.2d 470 State discerned, agreement ty of cannot be Examining entity, this contract as an we contract is unenforceable of uncer because complete are in accord with the district tainty. Jones, Elder v. 608 P.2d 654 language clearly provides court that (Wyo.1980);Engle v. First Bank National respect with that the contractual duties Chugwater, P.2d (Wyo.1979). of maintenance of insurance and indemnifica Certainly, parties implied can create an con against any tion terminated Bridger loss conduct, the conduct tract their completion period at for erection from which that inference is drawn must dragline shortly thereafter. We support be sufficient to the conclusion that agree perceptive with the observation of parties expressed a mutual manifesta the district court that: agree enter into an tion an intent to contract, apparent from the readily “It is Perillo, and J. ment. See J. Calamari whole, Page’s when it read as a that (3rd 1-12 19-20 ed. Law at Contracts § ‘operations’ under that contract consisted 1987). Although question of whether dragline Bridger, and erecting support is sufficient to particular conduct erected, Page no that once it was had finding implied that an contract exists obligation insurance further to maintain fact, to a trier of generally submitted agreement, ‘operations’ for its under this by summary question be resolved Also, operations complete. it as its were minds could riot judgment reasonable clearly parties intended Contracts, Corbin, differ. 1 A. Corbin on Bridger the benefit would have (1964 Supp.1984); cf. Pet 18 at 21-22 & Page’s operations warranty § limited after Campbell Hos County Memorial ersen erecting dragline agree- under the District, (Wyo.1988). P.2d 992 completed, pital and that there

ment were requirement be no further would re regard, In this Continental’s Page to maintain insurance. Plaintiffs’ response Bridger’s upon Page’s liance reading Paragraph effect problems request investigate certain Page has to maintain insurance dragline experiencing that was dragline ‘continuously’ end until the This re- suggested solutions. reading and to offer of the world is nonsensical *11 quest, URBIGKIT, Justice, Bridger’s response, dissenting. and occurred af- warranty period ter expired. had We completion discovery Denied and re- justify holding activity, cannot that this amend, jected right appellants to for leave more, without would serve to extend an liability damage lost their claims express warranty derogation spe- granted summary judg- on a motion for cific terms of a agreement written or result ment which was never made. contract, in the creation of a new the terms appeal per- This should be remanded to party. which are unknown to either appellants mit complaint to amend their Page only agree- demonstrated that complete discovery and their to correct the parties ment between these was that ex- they treatment received at the hands of the pressed contract, in the written and Conti- trial court process. which denied them due nental furnished no evidence which would Procedurally, improperly the trial court or, Page refute the evidence of any way, treated a motion to dismiss as a motion for summary genuine judgment demonstrate the existence and then of a is- used that summary judgment to foreclose the sue of dis- regard. material fact in this For covery appellants necessary considered reason, this summary judgment was sustain right, their claims of contractual properly entered on the claims asserted post-sale strict duty and a under contract theories. to warn.1 procedurally What was done present While Continental argu- does appellants compliance pro- was not in relating ments payment matter of rules, accomplished process cedural due volunteer, we see no need to address provided justice. Substantively, by incor- those contentions. The status of Continen- rect attribution of the major- existence of a tal as a volunteer would serve as a ity rule, adopts this court a minority pos- defense to valid might claims which have ture when it appellants’ holds none of Bridger existed favor of assigned by pleaded appeal claims as in this state a subrogation to Continental. In view of our by claim an upon economic loss attribution Bridger conclusion that has no valid claims which granted. relief can be Although I law, as a matter of Continental’s majority status as believe the adopt should not minority position volunteer is not to exclude material. liabili- ty, strict liability permit greater precision might While pro- have damage recovery of over two million dol- by duced an order grant- the district court lars sustained company coal ing the respect motion to dismiss with commenced, which suit was that atti- the tort theories asserted Continental tude minority does have some support. granting summary and then judgment with However, there essentially no corre- respect claims, to contract we have no diffi- sponding authority deny recovery culty perceiving premise for the rul- damages by deprecating post-sale ing of the district court. Since there are no to warn cause of action. From singu- these factual issues which any materiality, have precedent, lar failures in logic justice, I by principles this case is controlled strongly dissent. law, discovery pro- the denial of further First, I procedural will address the mis- ceedings by the district court was correct. upon appellants treatment inflicted disposition entry of the case substantively thereafter address case law summary judgment Page in favor of is an concepts reject which lead me to appropriate granting resolution. The order majority’s holding appellants’ claims summary judgment Page is affirmed. negligence, liability, strict and failure to URBIGKIT, J., dissenting opinion. filed a warn did not state a upon claim Denying appellants' permits motion for leave to the trial court to flaunt Pace v. amend, contemporaneous Hadley, (Wyo.1987); Torrey to the mo 742 P.2d 1283 dismiss/summary judgment, Twiford, (Wyo.1986); tion to cannot be P.2d and Kimb justified River, Wyoming precedent. ley City under (Wyo. This ma Green 663 P.2d 871 jority 1983). express violates the terms of W.R.C.P. 15 *12 discovery deposition produc- and document granted.2 could be relief by Insur- being pursued Continental tion (Continental) Chicago, in Illi- Company ance MISADVENTURES I. PROCEDURAL depositions to a Page brought the nois. man- Company (Page) Page Engineering though “ill” was not the counsel halt even dragline to strip mine and sold a ufactured refused counsel and then Continental lead Coal) (Bridger for Company Bridger Coal already copy documents opportunity the cor- production operation. The two its coal produced. during in contact porations remained County, Wyoming, Back Sweetwater periodic of and consulta- Page’s inspections parte quickly then filed an ex motion was During this the use. tions about machine’s This protective defendant for a order. reeving time, the Page came to understand judge the trial court that a motion assured faulty design and equipment block was Greenhalgh (Page’s Wyo- Mr. for motion easily fail, neglected to warn could during “ill” ming dis- counsel who became surprisingly, the reev- Bridger Coal. Not be covery) to withdraw as counsel would brought ing did fail and down block counsel could be made as soon as new appeal questions This who should boom.3 proved That assurance to be retained. $2,536,957 following cata- pay the Wyoming never since the “ill” counsel false collapse by the strophic of the boom caused restraining A from case. withdrew reeving failed block.4 against discovery was is- order continued any apparent opportunity for sued without including Suit was filed June objection response or Continental who allegations product liability of the claims pursue deposition attempting had been design, and and also defective discovery documentary and examination warn, failure to maintain insur- failure Page’s personnel and in Chi- records ance, express warranty. and violation of cago. and af- Page by general answered denial allegations of failure to state a firmative parte protective ex deter- order With claim, comparative negli- privity, lack of effect, Page ring discovery in filed its mo- gence, assumption 16, 1987, risk and unavoidable July to dismiss on thirteen tion proceeded normally The accident. lawsuit of the months after the commencement Wyoming July supporting attor- The brief the motion until lawsuit. during product liability Page suddenly argued “took sick” theories would ney for $2,536,957. dig- Replacement Appropriately is: cost of earth be realized 2. $16,- reason, ging equipment 000,000 approximated was to be unacknowledged it an whatever For seventy-five yard emptor, quiet its cubic 290,000 bucket of caveat defer- with endorsement ence to the U.C.C., legislative lifting capacity pounds enactment of rated for and inability study or a more fundamental Reeving per are holders 145 tons load. blocks issue, the courts have made a understand pulleys operation, in the cable used boom consider, instance, mess. The courts fail to for lifting processes. and movement definition of economic loss and whether any given fits case. definition the facts Company in and other 4.Continental Insurance generally disregard policies the basic courts collectively companies (designated as surance support imposition of strict which Continental) paid repair present this question application to the and their subrogation receipt. litigation pursuant to a recovery. be- loss The differences economic rights appropriateness subrogation opposing are theories tween by majority process is not considered confused, assumed, hopelessly ignored, either pursued opinion and will not be question it differ- is the whether makes Cravens, v. Dar Compass See Ins. Co. dissent. theory applied. ence (Wyo.1988) (Urbigkit, gan P.2d Comment, Agristor Leasing Spindler: Eco- J., dissenting). consequently pleaded and Not Loss, Liability U.C.C.— Strict nomic theory eq some (1989) considered is whether Mess, not 34 S.D.L. Rev. 103-04 What pursued indemnity have ei (footnotes omitted). could been uitable Bridger litigation Coal ther denial and $80,000 reeving approximately block costs Develop proceeding. See in this GEM claims or replace; improved model was available Inc., Diego, San v. Hallcr Homes ers Cal.App.3d $150,000. aft reeving approximately After the Cal.Rptr. apart col- caused the boom to broke block boom and bucket was lapse, the support claim come and that his client for economic loss. familiar Bell, expenses our Prominently Buckley pay would clients’ hav- cited ing deposi- to come back here for these (Wyo.1985). McLaughlin P.2d 1089 tions, suddenly were here Corp., (Wyo. aborted Michelin Tire 778 P.2d 59 *13 1989), J., at the last minute. Urbigkit, dissenting.

The trial court gave Continental fourteen ^{[*] [*] [*] [*]} He ^[*] days respond Page’s to to to motion dis- you you saying Are that are with- (less mailing time) gave Page miss and drawing Page Engi- defense of days reply. fifteen thereafter to Continen- neering point? at this responded, including tal that contention / intend to [WYOMING COUNSEL]: untimely the motion to dismiss was notify company that I insurance 21,1987. Page August filed a reply brief on am withdrawing health reasons. for later, days Three Continental filed a motion added.) (Emphasis supple- leave an for to file amended and Page’s Based on motion to dismiss and complaint. mental Continental also moved amend, faced motion with a for leave to previously disqualify to “ill” never granted non-requested trial court a sum- withdrawn local counsel on a basis. conflict mary September on judgment brief supporting this motion stated The sixteen page decision letter concluded: part given that were to “we believe that 12(c), provides Rule on W.R.C.P. that a discovery Page plant was aborted at the judgment pleadings, motion for on [Wyoming Illinois because was- counsel] matters pleadings outside the are case, withdrawing not not from this presented, the motion shall be treated as litigation altogether.” but from The at- one summary judgment. for I don’t transcript tached to the brief what related think it matters much in this case how it Chicago occurred on June 1987: contract, However, is treated. I like would [WYOMINGCOUNSEL]: policy subrogation insurance and the re- say for I to the record that I don’t feel ceipts are all before the Court and have depositions participate any can extensively referred to been all coun- history I health reasons. have a parties sel. Inasmuch as the have problems. heart have, they briefed the matter I as am 4 * * through I think I can don’t sit kind, going to answer and treat deposition another today. though case as summary motion for sit * 4 4 through any ^[*] I n am : sfc more physically depositions today. * * * sfc prepared n ^[*] to judgment to Rule “all do parties 56, W.R.C.P., so, and, had been shall be provided by given filed, if anyone reasonable pursuant Rule chooses 12(b)(c) op- to weren’t weekend on that. tions tion would don’t know that If MR. ^[*] weekend spent you here, HENSON: Since going had ^[*] the weekend then we cause told preparing sitting ^[*] treadmill at the us last wouldn’t have engaging ^[*] more through here. Friday for depositions you stress ^[*] spent gym, deposi- deposi- spent ^[*] than you I judgment, summary judgment pare such signature. Opposing counsel have to pertinent portunity to said. assuming [Wyoming approval as including September approval, an order to there is indeed submit it to such a present counsel] granting to form and to me for objections motion all material made will opposing any a motion for thereto, 1987 to please pre- more to be summary Rule counsel give fail- 56”, ing in they Mr. at which will be deemed have yesterday Anderson came approved. looking till quarter 5:00 while we were documents and said he wanted I One last observation. own a 1978 get warranty involved in the and that was case he ex Oldsmobile [which] going years ago, pired have take some time to be- and I have it insured. I lawyer, I never filed a lawsuit until causing acci as a Suppose breaks a wheel the car the facts were as I wanted to dent and extensive knew what my company pays Today, me. Is insurance I a cause of action. be sure had my against “subrogated” it then claim theory is shoot first and apparently, negligent design? It General Motors questions later. The additional dis- ask appears plaintiffs here that don’t seem to covery requested by plaintiffs is unneces- wear out even understand that machines sary and unwarranted. tually, somewhat like the “one hoss added.) railing (Emphasis After for two shay.”[5] discovery, judge pages against full the trial added.) Procedurally, (Emphasis Continen- concluded: *14 opportunity object tal was denied the of Plaintiffs’ Motion For Continuance Page’s when the trial court converted mo- Discovery [Wyoming denied. counsel] summary judgment tion to dismiss into a please prepare denying an order will only foreclosed not which should have been motion, granting Page’s an order motion 1283, Hadley, v. 742 P.2d Pace summary judgment summary and a (completion discovery), (Wyo.1987) judgment, opposing submit it to counsel summary judgment notice of con- also form, approval as to and to me for Torrey Twiford, version case of 713 P.2d signature. Opposing counsel have to (Wyo.1986). 2, 1987, including November within judge The trial had decided the case and give approval, failing which to such nothing change thereafter his deci- would they ap- which it will be deemed have sion. In his further decision letter of Octo- proved. 1987, 21, judge explained: the trial ber Responding untimely an such and un- I do not believe the decision in Pace justified decision the trial court to con- (9/22/87) Hadley appropriate here. summary vert motion to dismiss into agree I do not As a matter even of fact notice, judgment filed without Continental Pace, In supra. with that case the Su- support a declaration of its counsel in preme difficulty had no at all in Court the motion to reconsider and the motion to were, (3rd finding para- what the facts discovery, allow the continuance of a mo- graph, page slip opinion) 1 of but also discovery Sep- tion for continuance of “plaintiffs held that the were not allowed 15, 1987, and a memorandum in tember discovery.” If a reasonable time for support the motion for continuance of readily, the facts so Court could discern plaintiffs. my experience discovery comprehensive attachments. so could the with given by perceive majority correctly I not refer This court should take heed of advice do paragraph thoughtful scholarly appel- the next to the last of the ences one of the most actually eighteen page it served to decision letter for what be. late tribunals in this nation in an approval as That sentence considers the to form extended tort case review: subject 404, importance today's to Uniform Rules for the District Courts lies decision explication principles which states: so much in its of the tortious interference defamation as in its judgments Written or orders shall be signal approach great to trial courts to days presented within 20 after its to the court applications caution for dismissal under [a submitting decision is made known. Before complaint for failure motion to dismiss] party drafting judgment or order the may grant- to state a claim on which relief oppos- approval shall secure the written sought We have to make clear that such ed. motions, ing parties not in default. always brought very almost at the securing op- approval In lieu of litigation, grant- stage of the should be earliest posing parties party proposing the form of rarest If a com- ed in of instances. original judgment or order forward the plaint must be dismissed after it has been copy on the other to the court and serve accorded the kind of meticulous and indul- advising objections parties must with a notice opinion, gent in this examination counselled objection days. be made within If no then, barring any impediment made, other such as a may sign judgment timely the court limitations, made, dismissal should be statute of objection If the court will or order. plaintiff’s filing prejudice to a of an without resolve the matter. complaint. right amended Continental to make substan- Further Printing Sharp Electronics argument provided Mart-Morristown was not addressed or tive 31, Corp., N.J. 563 A.2d foreclosing announced. decision as then Septem- mute people The trial court entered order on on the street to not stand giving Page ber until October brutally young while a woman is killed or 1987 to file its brief answer to mo- ignores missing the traveler who giving tions for continuance and Continen- anyone bridge unwillingness in an to warn reply. tal until October 1987 to Resolu- Here, might who follow. in an area of tion, course, was the second decision cases, responsibility product liability within letter of October denied the we encounter manufacturers or vendors motion for leave to amend and the motion products may their who know cause dam- complete discovery for a and restated a age injury but remain stonefaced and granted decision which a motion for sum- products range silent. These can from the mary judgment which had never been exploding lighter to a motor vehicle which made. Schwartz, easily. tends to roll over presented very troubling We are with a Duty Two Post-Sale Warn: Unfortu- litigant clearly record where a denied nate Forks in the Road to a Reasonable process due and somehow out of that mo- Doctrine, (1983); An- N.Y.U.L.Rev. 892 rass, perceive this court is able that a notation, Failure to Warn as Basis Lia- contractual issue was not created as a mat- *15 partially completed ter of discovery with a bility Liability Under Doctrine Strict complaint motion to file an amended never Tort, (1973). 53 A.L.R.3d 239 In considered. view of the resolu- obvious egregious majority’s More is misap- is, essence, majority tion which preciation problem presented in what process that due does not matter a sub- disregard it does to destroy parallel or right exist, might stantive not I will not tort of failure to warn. The doctrine of pursue subject of the contractual issues application validity economic loss has no should, however, litigation. It be noted to the tort of failure to warn and neither the Wyoming counsel who ill” in “became litigant provide precedent nor this court and, fact, Chicago never withdrew did the contrary.6 The tort of appear argument failure to warn for oral before this tribu- recognized nal. It must also parallel be that sum- is intrinsically but not within mary judgment disposition of contractual product liability case law. Failure to warn claims completion has occurred without liability can frequently arise and does out- discovery in contravention of this court’s side of the law in merchant and commercial empirical judge direction to the same trial transaction Conversely, contract issues. Pace, in the earlier case of 742 P.2d at frequently may failure to warn not an liability issue defect strict cases. 59, J., McLaughlin, Urbigkit, 778 P.2d II. SUBSTANTIVE ERROR—DENIAL dissenting.7 OP CONSIDERATION OF CLAIM FOR VIOLATION OF DUTY TO liability cases, defect strict (UNWARNED WARN POST-SALE remedy the failure to warn tort exists in MASTER) DANGERS KNOW NO adopted states that have never the Restate- (Second) (1965) ment of Torts 402A Although always legal a reme- duty, not § duty obligations to warn can arise from liability. of dies of strict When the manufac- written, opinion cogent example. Inevitably presented 6. Since the an interme vides a is appellate appeared deciding diate non-recovery court case has legalistic and societalistic differences be- for economic will sim legal duty tween a moral and to fellow humans. ilarly apply liability to failure to warn for strict However, cases, product liability duty product liability within commercial transac applica- warn also achieves two faces with first Intern., Caterpillar tions. Utah Inc. v. Tractor dangerous product tion on initial sale and 741, Co., 108 N.M. P.2d cert. denied obligation previously prod- a different for a sold (1989). N.M. 772 P.2d 884 uct when the manufacturer or merchant comes replacement repair to know that a failure of liability may spec- 7. Failure to warn arise from danger an creates unreasonable risk of of dam- watching alligators pond they tators in a age. duty legal wayward approach The moral achieves a sta- see small children swim. —tort bridge pro- responsibility. A ahead is out occurrence likewise tus— sepa- duty to warn has two disputes, an possible, notice for knows harm turer first, applications. The rately identified replace required. Two opportunity to here, is the ven- presented A broad is not examples will serve to illustrate. upon ini- recently pursued responsibility campaign has been dor/manufacturer recall gas con- involving propane name or its intended use a brand tial sale if the dangerous danger furnaces. After a intrinsically trol unit for residential time, time, long cer- passage perhaps equally known to the user. may not be ex- tend to fail and create an duty responsi- tain units This sale date warn danger explosion and fire. The treme long-standing bility has extensive total effort at here, manufacturer has made a history.8 Conversely, presented See, example, and recall. identification post-sale duty to warn cause of action Co., 104 Young v. Robertshaw Controls developing theory of recently as a more That A.D.2d 481 N.Y.S.2d significant litigation im- liability now has separate part from the control unit is However, until River pact. East S.S. from the furnace itself house and even Delaval, Inc., 476 Corp. v. TransAmerica manufacturer. separate identifiable 106 S.Ct. 90 L.Ed.2d U.S. hypothetical compa- then the Consider (1986) protegee, the differentiation and its example pump of a car fuel rable the sale of elements of between gasoline may fail in loss of confinement acquired duty post-sale time and the knowl- gasoline consequently sprays on the edge duty particularized not occasioned had Fuels, Capitol motor of the vehicle. See duty discussion. “The to warn is an inde- Equipment 382 S.E.2d Inc. v. Clark determined the con- pendent (W.Va.1989). dangers Three exist. predeces- agreement tractual between the pump might cause the vehicle to The fuel successor-buyer corporations. sor-seller and *16 up, might it cause the vehicle to burn burn Fumer, Friedman, M.I. Products Lia- L.R. might and it up garage with the and house (1988). duty may bility, § 2.06[5] up occupants explodes. if the car burn despite ‘the of the transfer.’ arise nature application of the tort of failure Cases 801, Mfg., v. Elliott 879 F.2d Id.” Florom present difference whether the warn no (10th Cir.1989). The character of the 802 integrated part damage resulting from the in that post-sale duty to warn is illuminated car, house or a life. Eco- destroys the against asserted case where the tort is loss, signifi- has no consequently, nomic successor to the vendor. business duty by tort is from knowl- cance. Tested arises, duty it stems from Where such warn, and result- edge danger, of failure to relationship between the existence of the ing damage loss. and and the customers successor predecessor. Equip- v. faulty Polius Clark Existing separately man- Cir.1986); Co., 75, (3rd 802 F.2d 84 faulty designed merchandise ment ufactured or 57, (1975), Inc., Corp., 190 Colo. 544 P.2d 983 Chip-In-Saw, F.2d 616 Motors Hopkins v. 630 negligent justified (8th Cir.1980); Niagara failure to warn recov & Tool where v. Mach. Gordon 1182, product destroyed, Works, ery but not com reh’g of cost of denied 578 F.2d 871 574 F.2d Shields, losses; Cir.1978); v. Air (5th Griggs or business Hill Firestone Tire & Rubber mercial v. 112, Inc., Cir.), (Mo.App.1986), (8th where 721 S.W.2d 119 denied 423 U.S. F.2d 851 cert. 513 124, (1975); "Admittedly, 865, recognized: is no was there Sliman it S.Ct. 46 L.Ed.2d 93 96 277, America, may reasonably warning, as the manufacturer 112 Idaho 731 Co. v. Aluminum of — U.S. —, (1986), read nor heed that the user will neither 108 sume it.”; 1267 cert. denied P.2d Torts, (Second) 2013, (1988); supra, of Restatement 601 West v. 100 L.Ed.2d S.Ct. 388; Wade, On the Nature Strict Tort Rope 202 and § 197 N.W.2d Broderick & Bascom 825, Products, Liability 842 (Iowa 1972); Corp., 44 Miss. L.J. Connelly v. General Motors Lambert, Torts, 378, 630, (1973). 32 ATLA Tom on Ill.App.3d N.E.2d 132 Ill.Dec. 540 184 Annotation, 228, (1989) La Rep. and (1989); Corp., Ill.App.3d Law 235 Byrne v. SCM 182 370 Sold, 421, (1989); Danger A.L.R. 523, Incident to Article 86 tent N.E.2d 796 Ill.Dec. 538 131 (1933). Talmadge, Washington’s (N.D. See also Corp., Symons 221 N.W.2d 947 v. Seibel 50 Act, Puget Wilcenski, Liability L. Rev. 1 Mich.App. 5 U. Sound 1974); Glittenburg Product 174 (1981) Washington statute 321, (1989); discusses the and v. Jones N.W.2d 480 Binder 435 390, duty post-manufacture specified Pa.Super. where a Laughlin Corp., 520 Steel 360 & provision also included in the statute. Hiigel was General warn Of interest A.2d 863 658 752 F.2d

ing Corp., accord Mozingo v. Correct 168, 177 and n. 12 Manufactur- cinnati, Cir.1977)]. Inc.], While 565 F.2d our conclusion is ^[437] at 442 [ (7th procedure, on the rules of (5th Cir.1985) based federal (duty arises from continua- procedural we note that Colorado’s relationship tion of between successor substantive mandates the same re customers); law Travis v. predecessor’s Pust, Supply E.g., Union sult. 196 (7th Corp., Harris F.2d 448-49 276, 279, (1978) P.2d Colo. Cir.1977). corporation’s “The successor (failure jury question warn “tri liability stems not from its status as a judge al should invade the fact-find successor, its establishment of but from jury ing function of the in the clearest relationship im- customer that cases when facts are not dis poses responsibilities.” certain duties pute.”). summary judgment on Thus the Polius, 84; Mozingo, at 802 F.2d this claim must be reversed. Travis, 177; F.2d at 565 F.2d at 449. Florom, at 577.9 at F.2d court must look factors such as contracts, the succession to service cov principal prece- considered case erage particular machine dent on the function criteria of the contract, service of machine Cohen, post-sale Cover v. to warn successor, knowledge and the successor’s 61 N.Y.2d 473 N.Y.S.2d of the defect and the machine owner’s (1984), N.E.2d 864 where an accelerator Polius, 84; Mozin location. F.2d at problem bystander on a Chevrolet caused 177; Travis, go, 752 F.2d at 565 F.2d at injury. admissibility That case addressed 449; Downing see also v. Overhead post-sale technical service is- bulletins Corp., Door (Colo. 707 P.2d conjunction sued the manufacturer App.1985) (duty to warn exists where a with consideration of the cause of action danger concerning negligent warn, becomes failure including inad- subsequent known to the manufacturer missibility evidence “failure to delivery product, sale and warn cause of insofar action as it turned on though even not known of the vehicle at design at the status risk sale). time of the delivery.” the time Id. N.E.2d added). (emphasis Florom 570, 577, Mfg., v. Elliott 867 F.2d *17 reh’g (10th denied 879 F.2d Cir.1989). on court went to discuss: Florom, “cherry pick- which involved A may, manufacturer retailer how- er” equipment totally dissimilar ever, failing incur for to warn here, from the crane the involved Tenth concerning dangers in the prod- use of a Appeals recog- Circuit Court of further uct to which come his attention after nized: sale, through manufacture or advance- art,

The claim of duty of breach the to ments the state of the with which warn proper disposition by abreast, was not for expected stay he is to Leannais Cin summary judgment. through being made aware of later acci- [v. Appeals panel County 9. The Tenth Circuit Court on Colorado Rules of Court Civil Proce- rehearing subject pertinent (1970) added as a of review (adopting dure Federal Rule 18 on for this case: claims): joinder independent or alternate petition rehearing Fumer, has Liability not convinced § Products at 16.02[1] 16- opinion us that we should revise our require and (doctrine 16-112 of election remedies has any duty to warn claim be based place products liability plaintiff no area as solely negligence principles. jury should be allowed submit to the all 18, Fed.R.Civ.P., Moreover, under Rule "A evidence). claims on is sufficient which there compel plaintiff defendant cannot choose prejudice There is no here. evidence On peril theory upon at his which he intends remand, may plaintiff pursue duty rely thereby possibly defeat a and both warn claims under and strict consistent, where two tive theories can be concurrent or cumula- liability in tort theories. urged prejudice without Florom, 879 F.2d at 803. See likewise in tort ability to the defendant’s defend.” Senter Mart-Morristown, theory pleading, Printing Company, F.Supp. v. B.F. Goodrich N.J. 563 A.2d 31. (D.Colo.1954); 318(a), 707-708 see also Rule harmless con- commodity apparently tain dangers in the involving dents dangers, and when dis- tains concealed warning given be to users * * *. should through the chan- public to the tributed purposes for the and used nels of trade reasonably safe Although be and sold is sure to it was made for which in- sold and manufactured to, injure the health suffering cause risks of which no then known volves of, purchaser, even innocent some given, risks thereafter warning need be injured those though percentage brought operation user revealed duty to and a large, a arises be not manufacturer or to the attention of the upon manufactur- responsibility rests may impose upon one or both a vendor * * knowledge to the ex- dealer with er and duty *. to warn tent, least, warning ignorant at or ven- to a manufacturer What notice of the user of the existence consumer or by use of the problems dor of revealed so, Failing to do danger. hidden duty trigger postdelivery his product will manufacturer, dealer, who as well as the appears to be a function to warn knowledge impart and does not has the danger problem in- degree of it, subsequent, ignorant is liable to the number of instances re- volves and contempla- reasonably within purchaser, * * ported *. sale, original parties tion of the warning given to be The nature of the through such hidden injuries sustained given it should be likewise and to whom dangers. This is reason factors, including upon a number of turn public generally, the dealer owes to the may from use of the the harm that result concern, which includes all whom notice, reliability product without dangers give any concealed notice of per- any possible interest of the adverse traffics, commodity in which he in the user, son, if other than the to whom precaution a reasonable and to exercise the manu- given, the burden on notice protection of others commensu- locating involved in facturer or vendor think peril involved. We rate with required to persons to whom notice is principle applicable to the case at bar it can given, the attention which be many au- fairly deducible from given will expected a notice in the form touching and sale thorities manufacture recipient, kind of receive from the dangerous commodities.” the number manu- product involved and Comstock, Ger (quoting 99 N.W.2d at 634 taken, sold, steps factured or and the kin, likewise Bottaz 53). 143 N.W. notice, giving than the to correct other Inc., Helicopters, F.2d zi v. Petroleum * * problem *. Airways, Inc. Cir.1981) (5th Braniff Id. N.E.2d at 871-72. (2nd Corp., 411 F.2d 451 Curtiss-Wright Cir.), 90 S.Ct. cert. denied 396 U.S. by the New Among other cases cited *18 reh’g 424 F.2d (1969), 431, 24 L.Ed.2d 423 involving post-sale the failure York court denied, 829, cert. (2nd Cir.), 400 U.S. 91 427 Comstock include cause of action to warn (1970). 59, 27 L.Ed.2d 59 S.Ct. 163, Corp., Mich. v. Motors General (1959), Inc., involved an auto- Airways, N.W.2d 411 F.2d at In Braniff the semi- quoted mobile brake failure that claims first adduced the court v. Motor MacPherson Buick by ap- the warranty nal case of were barred based Co., In 111 N.E. 1050 of limita- 217 N.Y. action statute propriate contract Comstock, ample said, regard Motors had warn- to the air- Buick then tions and duty problem. ing plane: of a serious brake warning derived post-sale was provide to a product such a has that after It is clear Michigan case of Gerkin from the earlier in de- dangerous defects sold and been Co.,

Brown & Sehler 177 Mich. manufacturer’s come to the sign have (1913): duty attention, N.W. has a manufacturer the or, complete remedy these to either the fact is once established “When feasible, give at least remedy is not cer- experience that a by demonstrated continually struck fracture when warnings instruc- would adequate users operation. At issue was piston while minimizing the concerning methods for tions safety post-sale a non-installation of the danger. the warning by raising duty of device May, Deere 773 S.W.2d See John Co. allegedly con- of an defective manufacturer Helicop (Tex.App.1989) and Bell light improvement dition (Tex. Bradshaw, 594 S.W.2d 519 ter Co. v. of the acci- have avoided occurrence would Co., 773 Civ.App.1979). In John Deere found: analysis, In that court dent. 378, $2,652,000judgment was S.W.2d at persuasive find it jury could [A] price tragic for “the result awarded as accident, rep- prior a Smith’s sales failure to act of its [warn].” made two visits to the resentative fishing engine damage A vessel resulted Cudahy plant. each occasion he On unsupported from failure of an oil line or another to in- failed for one reason r Works, Welding v. Bende & Mach. Jones Cudahy safety by-pass valve form Inc., (9th Cir.1978). Liability F.2d designed pre- it and the hazard was justified by finding negligent was noti representative’s own testimo- vent. The problem had fication where been bulle ny is that these sales calls were made tined to dealers but not boat owners: by-pass safety after 1971 when the valve Caterpillar liability by Nor can avoid con- equipment had become standard on all tending duty that it had no to inform its new machines. argu- dealers it of the bracket. While Id. 275 N.W.2d at 923. ably Caterpillar true as contends that the The differentiation between incidents of safety lack of a did not cause a bracket subsequent post-sale duty initial sale ship’s passengers, hazard to the the dan- warn were related in Miller Industries v. ger posed engine ship and the 813, 818, Caterpillar Tractor 733 F.2d itself, shipper’s profits, if not the lost (11th Cir.1984): reh’g denied 738 F.2d 451 duty sufficient to create a to act * * * argument finding that a war [T]he light fashion. of the reasonable ranty preclude was not intended to comparable development at common law compel action is even more duty of the to inform as con- reasonable ling Jig here than in the Third. In Jig duct a manufacturer and the clear [Jig Company the Third the Third implication opinion of our recent in Pan Puritan Marine Insurance Underwrit Fisheries, Alaska Inc. v. Marine Con- (5th Corporation, ers 519 F.2d 171 Cir. Design supra struction & F.2d [565 1975)], plaintiff’s premised claim was (9th Cir.1977)], reject we also Cat- negligent design on the and manufactur erpillar's argument in- that the ing product closely and thus was form dealers is not enforceable quality related to the ultimate consumer. plaintiff’s expectations of how the Id. at 1335. Here, however, perform. would scope A similar in commercial gravamen plaintiffs’ complaint production canning pack- limited unit properly is that the defendant failed to aging equipment produced litigation warn of defects that discovered after Co., 87 Kozlowski v. John E. Smith’s Sons engine already on the market. (1979) where, Wis.2d 275 N.W.2d 915 adopting Whatever the merits of a rule *19 operation while and under maximum product part that views defects in a pressure, piston jetted a in the machine bargain parties’ the and thus within the machine, beyond safety line of the frac- sales, the law of it is much less tenable to operator. safety rings tured and killed the presume buyer bargained that the has appellant The contended the machine was away obligation the manufacturer’s to by design permitting the defective when that later come to warn defects the unreasonably dangerous duty existence of an manufacturer’s attention. A to argued product’s It there was a sub- warn of a defects of which the condition. was (as did) safety ring goes seller aware not to the stantial risk the it becomes warning ade- gent if the method of buyer the the quality of (Second) Torts, quate. Restatement type bargain, expects from the but c 388 Comment governs as a which tort law § of conduct * * * policy. public matter of social by of fact was created issuance question A impermissibly To hold otherwise would to the service manual. of a revision is aware that allow a manufacturer who damaged propeller the airplane was has on the market a defective inquiry of a sheared and created blade warranty to hide behind its while cause of action for duty post-sale to warn it.[10] buyer unknowingly uses jury verdict had plaintiff’s favorable been, initially That for the entered. verdict Overspeed airplane propeller occa- airplane resulting from the to consideration of the failure to warn sioned provided sufficient evidence propeller blade Corp., liability Noel v. United Aircraft negligent failure to finding a support (3d Cir.1964),where the court 342 F.2d 232 in the warn about a defective condition and its danger found the of the occurrence Bottazzi, product. 664 F.2d likewise hypothetical generally a effects not duty post-sale as a fail- raised the to warn danger. post-sale Evidence of recognized similarly justified recovery from ure which es- safety improvements was admissible to by power shaft failure an accident caused duty, any, the manufacturer’s tablish helicopter. The manufacturer knew purchaser of commercial iron of warn the potential problem and failed to warn safety fea- any deficiency in the ironer’s potential danger customers of the Ametek, Inc., 367 tures in doCanto v. action in overhaul specify corrective its (1975): 776, 328 N.E.2d Mass. manual. was evidence from which There analysis duty in the breach that the machine jury could have found duty is different from the breached warn braking negligently designed and its manufacturing product and by a defective misrepresented. When the capacity post- from a in a is also different breach of such a machine learns manufacturer duty danger, of a known sale to warn cre- have learned of the risk or should Supply Ships well-stated Nicor Associ- fault, duty take ated it has a Corp., 876 F.2d ates v. General Motors at least the steps to warn reasonable omitted): (5th Cir.1989)(footnotes * * * the risk. One such purchaser of courts, Circuit Two Eleventh at least step be to warn reasonable Caterpillar Miller Industries v. Tractor purchaser changes which eliminate (11th Cir.1984) acting F.2d 813 ] [733 the risk created or tend to eliminate River, Jersey and a New before East manufacturer’s initial fault. Court in v. Cater- District McConnell McCauley Corp., Indus. In Labelle v. F.Supp. pillar Tractor [646 Cir.1981), (1st the court stated: F.2d (D.N.J.1986) acting after East Riv- ] manufacturer’s to warn of er, a manu- distinguished between have extends, dangerous condition defect or negligence occurring part “as facturer’s however, product, purchaser of its manufacturing process” and of the * * *, af- if defects are discovered even negligent failure to warn manufacturer’s * * * * * * ter the initial sale. Both courts of a known defect. warning negli- rea- adequate, a must a manufacturer’s To be reasoned that dan- com- sonably apprise purchaser manufacture has been gence after quality pleted “goes an indirect not to ger by direct notice buyer expects from the warning or eliminates that the gives notice which type of conduct which warning bargain, but to danger. That an indirect governs as a matter of social law particular purchaser does fails to reach a policy.” public negli- the manufacturer not alone render *20 Inc., Myers, F.2d 10 & duty Coal. Tate v. (1st Cir.1986). warn in- Robbins unknown user 10. An issue of relation- A continued business presented because the quiry in this case is not Bridger ship here. Page existed was between sales transaction damage injury hose burst and resulted. In both Miller Industries and McCon- of the useful life nell, predi- claim Absent communication the failure-to-warn was limitation, liability prod- could result from knowledge gained by the manu- cated product had uct failure. facturer after the been deliv- * * * ered. jury for the to con- It was reasonable the hose failing purchaser While to warn a of a clude from this evidence product in at the time failed on 1985 because it had defect known June is, course, longer its life manufacture different from been service than useful manufacturing product, and that defendant’s failure to warn of a defective both negligent during product’s acts occur the manufac- truncated serviceable life turing process delivery proximate cause of its failure. and before of the product buyer. to the We are unable to Id. at 1286. relatively higher assign to either act a post-sale duty negligence to warn wrongdoing, level of consciousness of tort is the result of a circumstance meaningful and thus do not discern a a function of the sales transaction. 1A L.

legal difference between them. Friedman, Frumer & M. Products Liabili- supports Examination of the cited cases ty initiating 2.22 factors § presented. In thesis McConnell v. sup- arise when the manufacturer first or Co., Caterpillar F.Supp. Tractor plier recognize previously comes to that a (D.N.J.1986), the court said: product produces sold an risk unreasonable allege Caterpillar injury bystand- Plaintiffs that both to the user or negligent Secondly, possessor and Giles & Ransome were in er. of the informa- failing notify them of the defect in the tion makes no reasonable effort to meet its duty note provide crankshaft. We first that the East of due care to the information decision, it, possessor River as we read does not of the so that plaintiffs’ negligence potential damage bar claim. It can be avoided disuse River, plaintiff-charter- user, true that in Finally, East or correction. unaware ers, complaint, their danger, faulty the fifth count of of the use continues and, alleged negligently the defendant reasonably expect- within the valve, supervised circumstances, the installation ed an event loss occurs Supreme injury that the Court disallowed recov- from which result. ery on count as on the strict as well apparent duty It is is to first commu- products-liability counts because the loss- warning. provides nicate the This the user purely es sustained were economic. opportunity to avoid the harm. Conse- However, River, plaintiffs al- East quently, nothing itself has to do leged negligence that the occurred “as triggered by with statutes of limitation part manufacturing process.” 106 negligence warranty from the initial alleged S.Ct. at 2297. The sales transaction. Contractual terms of im- distinguishable; plain- the instant case is plied warranty, express warranty and waiv- assert, tiffs here not that defendants warranty er of are likewise not functional negligently manufactured the crank- factors the existence of the tort or relat- shaft, they negligently failed but that remedy ed to a from a failure to warn. plaintiffs warn of a known defect ease, Additionally, with one differentiated crankshaft. Co., Helicopter Bell 594 S.W.2d avoid- In ance Strauch v. Gates Rubber commission of the tort is ac- (5th Cir.1989), pur- complished by F.2d 1282 hose was reasonable efforts to com- chased from Gates Rubber Co. for ammo- municate under the circumstances and what, purposes. anything, nia transfer The manufacturer the user does thereafter responsibility failed to warn its customer the had to take heed remains no supplier. Rekab, average thirty life of months. the manufacturer or service use continued the customer Hrubetz 261 Md. When be- Inc. v. Frank & (1971), life, yond 274 A.2d the court found the non-communicated service *21 ries), yet it the controls nor did not recall the ferris wheel shaft replacement the of risk, attempt public the to install at the conve- to alert the to agreement operator upon nience constituted a “tintin- an affirma- of the but embarked instead message” post- to avoid designed abular sufficient tive course of conduct cal- liability. sale failure to warn tort For problems with culated to conceal the the cause derived from liabili- concealment, of action Allegedly this control. cases, ty of the the existence sale years after which continued for several tangible parties to object subjects death, undertaken with decedent’s of independent duties are the sales deceiving public the intention of initially in executed terms. transaction its large as to continued fitness use duty independent positive It is a of this which defendant control valve had although arising out of state of contract a minimizing placed in commerce and re- in by facts the contract. The court created generated by coveries lawsuits v. Armour & 75 N.J.L. Tomlinson faulty Although generally non- control. (1908) related: 70 A. disclosure or alone does not concealment * * of the contract creates a existence *, [T]he it is equate to fraud actionable parties subjects the to situation that principle long standing that “one who independent of that are the obli- duties danger- knowing sells article it to be * * gation *. perform contract by défects ous reason of concealed is regard to

guilty wrong, of a without contract, and is liable Among per- the most fundamental of privity person, including one not in rights, sonal without which man could him, an injury contract with who suffers society, right not is live a state of by reason of his willful and fraudulent including personal security, “pres- (Kuelling deceit and concealment” ervation of a man’s health such p. Mfg. supra, Lean 183 N.Y. (1 practices may prejudice or annoy it” 1098). N.E. 134) right recog- Black.Com. —a nized, say, in needless to almost the first intelligence Of similar case (Const, words of our written Constitution Buckley, the factual converse P.2d 1). assert, therefore, art. par. To Capitol American Oil Co. society, living organized, one in a state of 1, 157 Nicholas, 156 Va. S.E. 754 Oil Co. is, principles according as ours (1931), gasoline rather was delivered than law, need not common be careful that the ordered Gasoline was kerosene. endanger his the life or im- acts do product, used faultless but not when pair neighbor his the health of seems to fire unsuspecting purchaser to start a against the fundamentals. offend his coal stove with a result burned resulting explo more than desired in the Tomlinson, In the earlier case of dis- fact, injuries sion. As a matter of serious eased unfit food was sold. A more court, finding Virginia resulted. example ignored duty current to warn about the distributor Young, warn is found in N.Y.S.2d 891. quoted an even improperly delivered fuel Company is a nation- Robertshaw Controls case, Virginia Oil Co. earlier Standard ally control vendor of units established Adm’r, 824, 47 S.E. 102 Va. Wakefield’s propane water furnace and heaters. (1904): 893-94, court, 481 N.Y.S.2d at Young, described that: rule “It a well-settled seems to be person law that a who

[Ejvidence plaintiff indi- the common tendered negligently dangerous instru- years uses a cates, prior that for a number article, or authorizes ment or or causes decedent’s death defendant was aware a manner or use in such repre- its another valve was defective and control that he (there under such has danger public circumstances real sented a likely pro- it is reason to know that more than acci- apparently had been for the natu- injury, responsible inju- duce resulting in 32 deaths and 77 dents *22 probable consequences Knowledge Danger, of his ral and Defendant’s A.L.R.4th 368 Annotation, (1984). also any person injured is not act to who Case, Liability Discovery, In Products himself at fault.” Knowledge Injury As To To Defendant’s Judge In the same case Buchanan Complaints by Plaintiff, Than or Others quotes approval Thompson from on Product, 20 Related to A.L.R.3d 821, Negligence, vol. follows: § cases, these “The doctrine of stated fallacy majority collaps in this is in The that, general way, person in a if a ing post-sale duty this to inform into con chattels, goods, machinery sells or cepts product liability recovery limitation defect, posses some concealed where economic results from harm, will, tendency to do such as ac- usage product. A faulty of a contractual cording probabilities ordinary to the corollary thesis with attributes of statute experience, per- do harm innocent warranty of limitations or limited time of sons, respond he if must nothing danger has to do with the societal such harm ensue without interven- faulty product knowledge from a where the tion of the or fault of oth- necessary protect is encased in the ers; upon principle it would be originator. authority hands of the The knowledge immaterial whether the supporting misapplication this of a differ the concealed vice or defect was with- ing responsibility protect society purchaser through held from the injury product liability concept as a is a unskillfulness, ignorance vendor’s appel current case from an intermediate fraud.” late court makes the same mistake Oil, American 157 S.E. at 757-58. Intern., repeated by majority. Utah post-sale duty Caterpillar Presented here is a when Inc. v. Tractor 108 N.M. P.2d manufacturer or vendor comes to know cert. denied 108 N.M. (1989).12 danger may that a from continued use ex 772 P.2d 884 Mexi New opined ist to the co court that the commercial property. as well as other trans action factor post-sale duty concept A was determinative denial of to warn is an recovery damage. emerging economic That court concept upon tort founded a con specifically then said do not address cept any requires choice the knowl “[w]e question of whether the same edge rule originator to chose and the apply should to non-commercial consumers responsibility retains a to furnish injuries.” who suffer similar Id. 775 P.2d permits that information which the user to regard at 744. In separate claim for exercise a choice.11 See differentiation and warn, negligent failure to that court then distinguishment post-East River said: Zidell, Cargo, case Freight Inc.

Subfreight Barge F.Supp. policy ZPC same believe that the consid- [W]e (W.D.Wash.1987) McConnell, apply erations which to defects in manu- F.Supp. facturing apply 1520. Non-communicated knowl also to failure to warn of edge Schwartz, is the tort foundation. su defects. Post-East River cases other pra, 896-97; appear apply broadly N.Y.U.L.Rev. Annota than McConnell tion, Liability: Liability prohibiting Strict Products the rule for eco- * ** Thus, Dependent Failure to nomic Warn as loss. we hold that in said, edge intelligence 11. As William James the truth of an idea is is to withhold both and choice. stagnant property not a inherent in it. Truth duty responsibility to warn as a moralistic happens to an idea. It becomes true. It is dangerous is not limited to continued use of a is, fact, verity made true events. Its west, legend product. By in the old it was event, process. process namely verify putting foolhardy called caution before cour- ing validity pro is verification. Its is the or, it, itself age you may do be the last mistake cess of its validation. you will ever make. Here, speaks practical to warn desirability Caterpillar Company frequent moral of avoided harm. To know is Tractor is a intelligible deny product liability to have an choice. To knowl- visitor to these industrial cases. economic settings claims for court wish review this instruction commercial product injuring upon remand, itself due to inasmuch loss from as a manufacturer pre- failure to also negligent responsibility warn are has a to warn of a defective recovery. cluded from product at time after it is manufac- *23 if the tured and sold manufacturer be- Id. 775 P.2d at 745. Id. at 877. comes of the defect.” aware quotation law re This reflects how bad Corporation The il- misquotation improper or exami FMC crane accident sults judge invalidity cases. The lustrates the theoretical this nation of federal district Dairy Harvestore damage Frey A.O. Smith adaptation in court’s economic when Products, Inc., (E.D.Mich. applied post-sale duty F.Supp. 680 253 to a to warn cause 1988) (also case, company frequent a action de- faulty is a claim. product liability cases), vice visitor to these on the boom caused the death .crane case, bystanders. discussion or two analysis without about innocent In this duty claimed, only by warn which was the was blind luck to stated that no one was damage reeving precluded plaintiffs failed, rule killed when the de- economic block stroying on all tort recovery by remedies citation of the boom and the dirt bucket. Michigan and a case. The in a federal state On differentiation thesis that no viable appeal, Appeals negligent the Sixth Circuit claim of violation of duty Court of to completely in approach took a novel affirm warn after sale can be stated one here and court, Corporation FMC could in ing the bad decision of the trial be stated is Michigan simply of which fit neither case law absurd. Sales contract conditions discerning absolutely nothing that tort waived and warranties have remedies were Frey Dairy logically with contractual exclusion. to do the existence of the Inc., Products, A. Harvestore same O. Smith only tort in cases. One to both needs (6th Cir.1989). Michigan recognize F.2d 128 absolute axiom The of accidents case, McGhee v. GMC Truck Di gamble that if & Coach a is made from which dam- vision, age itself, Mich.App. result to the 296 N.W.2d loss later, (1980), time, not did involve or raise issue of sooner or not most of the See, injured or, to as duty warn claim. someone will be or killed at moreover, least, Mulholland v. Intern. damaged. DEC other The com- Corp., parison happenstance 432 Mich. is 443 N.W.2d illustrated Inc., B Printing Likewise, & v. Suich v. H Machinery, S.M. Wilson Co. & Inc., (9th Smith Intern. Ill.App.3d F.2d 1363 Cir. Ill.Dec.

1978) present (1989), not duty lacking appropri- did claim N.E.2d 1206 where warn Light either. Florida Power & Co. v. warning, gantry ate collapsed crane Corp., Elec. Westinghouse resulting injured 510 So.2d 899 award (Fla.1987) $2,800,707. supply only involved nuclear steam worker of The difference provided here, systems way no discus is that no one was in the issue or in H B& post-sale collapsed. Again, duty sion of a unmet to warn. the machine Inc., Printing Machinery, injured Appeals Tenth Circuit The Court of wrong place worker was Corp., (10th Smith FMC 754 F.2d wrong time.13 Cir.1985) safety pro- considered a device “two-blocking.” recognize tect a crane from Rever- The duty text authorities sal of a defendant’s verdict came deci- warn if the are even what has appellate improper generally sion of court on the been referred economic assumption premises of an damage. recognizing inclusion of risk instruc- Prod- regard Madden, to a instruc- in 1 spelled tion and contested tort are out M. (2d Liability ucts tion on defective 10.13 at ed. where 453-55 § 1988) (footnotes omitted): court appellate directed that “the district Compare milking the defective machines issue was even considered in the first series not where there was economic in Mul appeals. holland, preclusive 443 N.W.2d where this reeving block defective. Coal post-sale duty to warn attach A was, defec- Bridger replaced at the could have if the time Coal even sale, reasonably $80,000 $150,000 safe manufacture and reeving tive block — (or so), through use arguably reeving for use using the old block continued betrayed operation, has hazards catastrophic followed. loss that risked the seller, or to other earlier known to they allowed point would have been sellers ^[*] tfc like products. ^{[*] [*] [*] [*]} to make an mined whether informed buy decision safety and deter- a re- placement product. equally true of the As warn sale, point at the the doctrinal under- majority wrong precedent, *24 of pinning post-sale the manufacturer’s rejection of wrong theory, wrong in and in obligation is the commit- informational obligation to contribute the effective- to remedying asymmetry ment to of efficiency of nation’s econom- ness and seller, by the on the one information held ic institutions. hand, and by the consumer the other. terms, object, general is in to encour- III. PRODUCT impart age manufacturers to to consum- LIABILITY—PROPERTY ers that information the manufacturers DAMAGE ordinary in receive course of their business, germane product safety to and (WHAT DAMAGE?) IS ECONOMIC technological per- advances and to the presented clearly This court is with a formance and accident histories of those appeal defined substantive determination products in use. sold and whether the economic loss doctrine bars likewise, Friedman, M. See 1A L. Frumer & recovery reeving failed where block at no supra, 2-1071. “Even there is damage and shovel caused the boom and sale, of the to warn at the time facts equipment. Disregarding drag of the line may thereafter come attention by by-passed all contractual issues denied imperative manufacturer make it discovery substantively significant and given.” warning that a then be Id. at implied mer- concerns of warranties of 2-1071. See also 1 American Law of Prod- chantability purpose and fitness for the Liability 3d, (1987) ucts 1:67 at 71 and 3 § intended, presented are economic we under 3d, Liability American of Products Law (a) topics loss doctrine what is economic (1987). “Thus, at 20 a 32:6 manufacturer § (b) proper damage; viability of the econom- dangers prod- must inherent in its warn application ic loss doctrine for under these uct that it or should known knew have properly as it be con- circumstances should during plaintiff used the about the time fined and defined within current literature product.” Id. catastrophic when occurrence is and authority real majority,offers no threatening; (c) life constituent dam- deny post-sale a breach of age parts equipment. to other reflect, duty to warn. As the authorities distilling the three substantive a Before responsibility the issue is to share infor- analysis made purchaser precedent mistakes mation in order afford the court, helps damage by set out what is opportunity and loss. to avoid Bridger by meant the terms courts.14 Page easily could have warned used Wattson, negligence liability. Property Damage concepts Bland and strict 14. & type classify Caused Products: What Losses are To a certain of loss as “econom- Defective Recoverable?, ic,” however, predetermine L. 4-5 Wm. Mitchell Rev. is to its recovera- (1983) (footnote omitted), liability. which states: bility in or strict It central strain this dissent that is the The line non-recoverable economic between adjudicatory many property damage deliberation cases first loss and is not recoverable recoverability difficulty easy then the curse of courts have had made as to draw. The damage defining opinion to is thrown at the loss" in manner which economic "economic large warranty concepts justify predetermined ma- preserves denial. A embodied jority loss involve di- of economic denial cases the Uniform Commercial Code well as negligently damage, Claims manufactured or es the different dimension of improperly designed product potentially in- also into direct and indirect divided dam- damage: (1) ages. economic clude three kinds of economic Direct loss considers loss; (2) property (each damage performance of which factor of spe- diminished indirect); (3) personal direct faulty product or cific the diminished value injury.15 judicial Case confusion delu- expectancy which results unmet frequent performance replacement sion results from the mischarac- or and includes repair. terization between these three kinds of cost of Indirect economic loss A damage. property damage direct claim the down time the loss of use which repair profits during repair is made when the claim is for includes loss The Vexing Prob- replacement damaged Comment, An indi- replacement. item. Purely lem the Economic Loss in Prod- property rect claim is made ucts An is made to Liability: Injury in Search of claim recover property the user or a Remedy, 4 Seton Hall L.Rev. additional owned 154-55 loss, party. (1972).16 course, third Economic Additionally, which address- given rect and not loss economic difference value between what is bargain” realistic within definition of terms to deter- and received—or "loss of differ- —the *25 mine. ence the value between of what is received interesting represented. It is to note authors that those and its value as Direct economic only expressly may replace- state "Texas is state to refuse be loss also measured costs of recovery damages injury repair. Consequential to allow of for to the ment and economic itself, loss, product injury even if the from all results loss includes indirect such as of loss unreasonably dangerous resulting product.” profits inability defect from of in the to make use They product. Id. at 14. then state law of Minneso- defective "[t]he approach A recoverability ta is unclear as to the somewhat different definitional is Note, injury Liability: product Expanding stated in Products for an to the Id. at 16. itself.” See, however, Note, Property Damage Exception in Pure Economic the definition in Econom- Cases, (1978). Loss 54 Chi-Kent L. Rev. Liability Jurisprudence, ic Loss Products (1966) (quoting L.Rev. Colum. precise distinction can be made be- "[N]o Motors, 15. Cal.App.2d v. Van Etta Fentress property damage tween Ribstein, and economic loss.” 863, 866, (1958)) (foot- Supp. 323 P.2d Deciding Guidelines Product Eco- omitted): *26 in is liability cases not whether recognized if economic and non-economic by resulting there was definable a tort damage considered. is That would have exists, damage, tort but when the what here if been case other or an resulting compensable.17 damages are employee way in had been when the boom folded like a windblown match-stick This court to rela- is asked determine the injury damage house. or not there of what economic Whether was or tion it calls property damage alongside recovery economic loss the determination of when inquiry recovery damages question raises the where can be obtained. The phrased analysis Commer- can in authorized—under Uniform that either the theory particular cial contract under does Code and or tort not exist a character or, liability. damage is produced alternatively, tort claims of and strict particular Common indicates exists sense the existence of tort but a character of not damage other should determine wheth- is not recoverable. first con- Consequently, operates justifica- er a tort committed. was to struction from result to conflicting legal It is the author "the rationales noted concluded manu- and theories of generally recovery. facturer should be held liable for Note, (footnote omitted). at [what as] full extent he classified direct Id. See likewise supra, economic loss.” Id. 182. L. Rev. 963 Chi-Kent with the broad genius expansive law lies in confined common rule then a consumer ability, presented problem, expectation. with a new and, thereafter, remedy provide to a to find or analysis This attunes to the of some direction theory develop legal justify a it. When analysis parallel in cases with East River S.S. problems consequential of direct and eco- Corp., 476 106 S.Ct. that the U.S. at 2295 seriously proposed nomic first as loss were buyer using purpose and his character compensable injuries, the had difficul- courts compensability any particular upon in ty finding acceptable legal determine basis an result, arbitrary recovery. sympa- case. differentiation of users into justify which to As a buyer either a or as the justify recovery commercial consumer thetic were forced to courts is, itself, providing Iitigative protection standby, public upon policy, and test of in old nu- that interesting process equal protection legal ap- fictions. This ad hoc due merous other proach developed hopeless inquiry pursued not here. a morass has into comprehensive review of reasoning. A careful and and, faulty my opinion, is tion in persuasive many cases establishes regard existed without perceive I the tort approach the second recognizing thesis non-eco- of economic for differentiation That is achieve decision. used to should be results, injury dam- personal nomic such determine, “is there a tort?” simply first question of recov- apply the ages. I would so, damages can be recovered. It If what character of analysis of what ery to the analyze provident losses may be more wrong. committed rights from the flow liability will be recovera- for which tort while approach result-oriented One unanimously, damages in de- Nearly ble. at least principle or the other seeks some liability cases are not recov- fective disorganized field of direction within this bargain the loss is a failure of erable where law. expectancy resulting from an unmet tort, This is not it is product performance. is invoked second theory A of tort law majority of the Conversely, contract. concept way to limit approach and a pervasive reason find cases and the most conflict, Clearly, the recovery by the first. accompanying right to recover the tort and reasoning ferti- illogical confusion and any resulting damages failure of a Supreme by the United States Court lized dangerous product unreasonably Corp., 858, 106 East River S.S. 476 U.S. sudden, unexpected, calam- loss event by adaptation of its result-ori- S.Ct. at 2295 developmen- than itous or accidental rather damages limit denial ented effort concepts these is the Appended tal.19 recovery responsive theory exists for part productive relation of the failed (in the commercial of economic attached and unit as intrinsic or whether transaction?).18 part or to the entire is to See, however, Note, 1978)). provide Prod another Torts—Strict 18. The denial cases Liability Liability using justifica- uct in Tort Allows Re incongruity which results from —Strict covery Physical Harm to the Product applica- a rule for tion in East River to create Itself Bargaining Strength Equal Ex Unless Parties settings when tion. It is stated "in commercial Liability. pressly Air Waive Tort Mid Continent large bargaining power, disparity there is no Service, Spraying Corp. Curry County product injuring itself economic losses from craft Inc., (Tex.Civ.App. 553 S.W.2d 935 prod- in actions for strict cannot be recovered — Amarillo granted), writ 9 Tex.Tech L.Rev. 733 negligence in manufacture or ucts Intern., Inc., *27 warn.” Utah 775 P.2d at failure to product’s 2. fact that a defective self- ”[T]he 745. inflicted is coincident with economic adaptation Consequently, this adds two addi- any physical make it the less loss does not damage,” First, principle the rule. is tional factors to and, recovery consequently, justi is transactions, whatever limited to commercial Note, supra, Mich.L.Rev. at fied in tort. 84 521 means, bargaining equals power, that Inc., (citing Karagheusian, A & M 44 Santor v. judged computed. to be however that is 52, (1965)). N.J. 207 A.2d 305 differently applied be How this rule is to surprisingly, 3. The third rule stated is: "Not car, leaking up pump that burns fuel majority a third of courts have turned to maybe compared owner as to the house and approach, upon based the landmark decision of truck, garage where the commercial trucker Co., Seely Motor Cal.2d 45 Cal. [63 v. White 17, similarly perhaps are at risk is the driver (1965) Seely Rptr. court ]. 403 P.2d 145 Supply Ship logically Nicor established. Cf. imposition requirement reasoned that a for the Assoc., F.2d 501. 876 liability is the existence of an of strict unreasonably dangerous defect, only so that review, Note, Privity Revisited: 19. A well-cited should be available for contractual remedies Buyer Recovery by a Commercial Tort for Note, supra, ordinary qualitative defects.” 84 Damage, 84 Product’s Self-Inflicted Defective (footnote omitted). (The Mich.L.Rev. 522 (1985), finds within the Mich.L.Rev. wrong analysis Seely, is dead author determining approaches to cases "four different clearly applicable Washing is the statement prod- recovery is available for a whether a tort Graybar Elec. ton Water Power Co. v. damages.” That author states: uct’s self-inflicted 847, 774 P.2d amended 119 P.2d Wash.2d recovery product’s (1989).) 1.Deny defective for a approach that eco to contract law for the reason 4. The fourth turns self-inflicted physical key dam factor the existence of coincidental with and introduces as nomic loss is Note, Note, (citing supra, privity. 84 Mich.L.Rev. at 523. age. supra, Mich.L.Rev. at 521 Realistically, Curry County cases are confirmable in re- Corp. few Mid Continent Aircraft (Tex. analysis. Service, Inc., by use of this definitional sult Spraying 572 S.W.2d recent is the best reasoned the clearest and destroys the unit, pin that e.g., the wrist Washington Water Washington case of up that eat blades motor or the turbine Co., 112 Graybar Elec. Power Co. example is the broken Another generator. 847, 774 P.2d amended Wash.2d in- separately that causes truck frame again reminded are We P.2d mixer to break loose stalled cement factors recognition of the only first damage the truck cab. made should be the decision from which develop from the All conflicts of these analysis be reasonable rational and can a required of what is recoverable delineation applied. liability tort. any product damage from concepts apply any of these States which ECONOMIC TO IV. APPROACHES right to recover for agree unanimously the IN PRODUCT DAMAGE RECOVERY personal physi- if damage exists sustained THE THREE LIABILITY CASES: product failure. from the injury cal results DIVERGENCES bar typical bad tire and rollover This is the unanimous, Nearly injury eases. A. General Standards user part if the failed permitted standards to possible There are three damage.” The ex- causes “other recovery can be pick from to decide when refrigerator Largoza v. General ploding “economic the loss is said to be had where (E.D.Pa.1982) F.Supp. 1164 Elec. loss”.20 set in Romano up television and the blown In addition to con- 1. Standard: Santor Co., 114 R.I. Westinghouse Elec. remedies, and wear obsolescence tractual (1975) resulting fire 336 A.2d 555 by product recovery may obtained out examples. serve as destroyed the residence tort of liability theories of strict manufacturing design or defect extreme, if the To the other (Obsolescence and upon initial sale. warn problem is essen- part or if the damage, bargain.) failure of wear out tially expectancy, a failure in few damage. This cases find recoverable Catastrophic Loss Use Unrea- unusually dangerous or calam- leaves Product sonably Dangerous Standard: occurrence as unsettled sub- itous event tort theo- Recovery permitted for those analysis I that this jects. find within event of loss was sudden or ries if the minority pos- adopts obviously majority application the catastrophic and some ture, clearly regressive aptitude unreasonably dangerous which is a with- product was (Ac- product liability unexpected law. Good Wyoming loss resulted. in which misapplication loss, unreasonably dangerous na- rejection reason for cidental prod- thoughtful occurrence and defective many in the dis- ture of the can be found uct.) of cases. One of cussions in the multitude *28 bargain by anticipated of his achieve the benefit remains as to what constitutes 20. Confusion still theory. is the non-contractual This damage the for which the defined economic application poor product, of so what?” subject proper "damned applied. of a will be rules arising product industrial law to the American damage will be con- definition of economic generation greed of and the era of from the major segment of this dissent sidered in the fifth Engineering irresponsibility. See Hart Co. v. regarding Property." "Other (D.R.I.1984), F.Supp Corp., 1483 593 FMC that court stated:: where dangerous- cases where 21. There are a line of recovery rationale, however, apply the rule of no parallel ness is absent that for is no There provisions prophylaxsis provide extending special for economic loss unless contractual to this recovery. product disappointment the con- such These are in would allow relief for mere Note, circumstances, Lia- the performance. cases. See In such tr&-Santor Manufacturers' present; bility “Economic Loss" and the need to Remote Purchasers imbalance is not same for Contract?, rendering legal rights expansive Damages 114 U.Pa.L.Rev. for an —Tort Wade, considerably (1966). Liability less. As the Purvis Tort Prod- remedies is 539 Cf. Co., Energy Products Causing Physical Injury 2 the v. Consolidated and Article [Purvis ucts Cir.1982)] (4th where, U.C.C., (1983) court 222-23 without 674 F.2d Mo.L.Rev. 1 48 buyer dangerousness, cannot remarked: the- unreasonable

671 The East Riv- 3. East River Standard: bargaining equals.22 sumer transactions er standard recovery the is na- denies loss of If transaction not commercial ture, damage product applied the to be is in a no economic from defective rule man’s contract. East by except provided concept land where this is utilized. The River is East River is binding admiralty divergence and the from cases other split diversity ignore justification federal courts with review of the factor and the apply non-admiralty applications. uniformly product other thesis that with internal failure, deny recovery equipment These are the cases that not confined is catastrophic whether or not the event recoverable in tort. danger or unreasonable was created in Permitting recovery when the loss cat- is

product failure. astrophic product unreasonably divergence ap- dangerous the There is further use is predominant the stan- East River. plication of Some non-admiralty cases follow dard for eases which is con- River East justification trary the and result majori- to the assertions the made apply standard, ty.23 emergence the economic rule to non-con- With the they products carry sludge the pump All risk that will Id. at 1484. The sewer did not poorly. perform. Companies serve their intended function sense, In this Richard O’Brien v. Chal ''ordinary" Bros., Inc., (D.Colo. lenge-Cook F.Supp. risk of malfunctions is 672 466 contemplation average 1987) (the well within pumps perform); concrete did not purchaser. Calculators, Copiers Typewriters Inc. v. Toshiba quotes Laugh The author then from & (D.Md.1983) (the Jones Corp., F.Supp. photo 312 576 Corp. Corp., lin Steel Johns-Manville Sales 626 copiers reproduce); Frey Dairy, did not 680 (3rd Cir.1980): F.2d (the 288-89 F.Supp. improperly); feed 253 silos worked phrased Third Circuit the ratio deciden- (D.N.M. [T]he Corp., F.Supp. Allen v. Toshiba 599 381 1984) (the di for rules as follows: photocopiers reproduce); did An not per- The rationale strict glo Ameron, Inc., behind Bulkships, Eastern Ltd. v. 556 injury (the sonal situations not well-suited to F.Supp. (S.D.N.Y.1982) coating 1198 tank alleging only facilities); claims economic Econom- loss. protect ship did not container ic results failure loss from the & Cincinnati Gas Elec. Co. v. General Elec. perform expected by buyer (S.D.Ohio 1986) (the to the level F.Supp. 656 nuclear frequently seller. loss Such is most plant temperatures could material not handle repairing involved); Products, measured the cost of infirmi- Argo and forces Welded ty by the Sons, Inc., difference in the value of the Ryerson Inc. v. J.T. Steel & product as it it would (E.D.Pa.1981) (the exists and value F.Supp. steel not did Thus, performed expected. have if it had requirements); meet fabrication Klo-Zik Co. v. always (E.D.Tex. economic loss is almost incurred F.Supp. Corp., General Motors product, by persons 1987) (the the owner of the not who perform); truck motors did not merely Hills, use it or into with it. come contact Corp., Roxalana Ltd. v. Masonite Engineering F.Supp. (S.D.W.Va.1986),

Hart 1483. at F.Supp. 1194 813 F.2d aff'd sum, undeniably (4th Cir.1987) (the In seems better rule stucco did not last weather). be that the law of contracts the vehicle Virginia West unrequited purchaser’s aside, choice to redress a ex- drag We set for the of this can purpose pectations product efficacy, where least collapse, industry line those failure cases since (as here) parties privity contract catastrophic directly are immediate events here did ample opportunity and have had allocate greater damage threaten put where failure regrettable those in- risks involved. other or life at risk. stances where the turns sour and Note, lemon, supra, 22. 9 Tex.Tech.L.Rev. 733 proves to be a should dulcification Note, Liability Products in Commercial Transac- bargain, flow from terms of tions, vagaries Minn.L.Rev. See also permit law. To Note, supra, 84 Mich.L.Rev. purely in such economic losses *29 would, by happy circumstances unless coin- recovery Significant supports such was with the federal case law tort cidence agreement consistent 23. parties, danger. contracting between the remedies for unreasonable damage Product very upon majority pos are which cases the moderate undermine foundations See, historically examples, have been ture. business transactions as Dixon International Thus, Co., (5th Cir.1985); disappoint- couple product 754 F.2d built. to Harvester Two Service, recoup- Breeding ment with traditional notions of tort Rivers Co. v. Curtiss 624 F.2d Cir.1980), (5th reh'g mix ment in such a context would be to mat- denied 629 F.2d 1350 anti-matter; amalgam cert. U.S. S.Ct. ter and resultant denied 450 (defective semen); (1981) and Co., be much to in a L.Ed.2d bull would too volatile make sense Yards, setting. commercial Texsun Feed Inc. v. Ralston Purina East River of cases standard line permitted re- the Santor approach which to commercial may may or not be confined was for and wear out covery obsolescence bargain- equal there is transactions where is This true even generally discarded. purchaser and ven- ing power between Santor had initially Jersey New where Unfortunately, dor or manufacturer.25 argument principal for enunciated the opinion do not and writers commentators respon- coverage liability of better if it is commercial know to do not a what sup- or sibility in tort to the manufacturer they still to follow and want transaction plier product. Riv- of East recovery precept non-tort er. Admiralty good is not a foundation law apply is of which standard to conflict to control from which to build law only reme- one allows those between system. may be American economic What and one which allows a dies contracted for exactly appropriate shipping may not for liability or strict tort claim given is fuel or the fit the farmer who bad catastrophic and a the loss is provid- is establishment which commercial dangerous to unreasonably use. Under is regu- faulty propane heating system ed a standard, it is not this tort relevant States lator. I can leave the United damage to other or to Supreme derivation of Court continued human life.24 admiralty.26 common law Cir.1971) (Texas (5th array concepts. Uniformity applied following of re- 447 F.2d law consistency gain cattle). weight product-fed sult exist and little to deci- does not law, perceived. as dis- sion can be California During period in which the law is con- 24. infra, any probably cussed does not fall within interests, stantly expanding protect new categories apparently applying a as these debate is too often between those ad- loudest vocating particularized approach. contract change and no at all those demand- damage 1. Santor —economic recoverable fabric; ing legal substantial revision including Gen- tort obsolescence and wear out. ignored too often are the narrow distinctions erally concept. abandoned degree the law which make rational danger catastrophic 2. or No unreasonable coherent. in the area of economic loss no Yet event confined This failure. Relief to contract. possible inquiry fruitful is without close con- obsolescence, wear includes out and insufficien- do, underlying sideration fact, factors performance predominate cies cases. The drawing dictate the of fine distinctions. recovery by general rule citation of denies Hopefully, deciding expand whether Seely, case of P.2d California 145. encompass manufacturer's eco- dangerousness cata- 3. Unreasonable and/or loss, nomic inadvertence, courts will reach results This, strophic hand event failure. as the case at will but instead focus on permits majority perspective, policies to each be furthered decision. damages. This v. Kit economic is the Cloud Note, supra, 66 Colum.L.Rev. 966. (Alaska Mfg. 1977); Washing- P.2d 248 1199; Star ton Water Power P.2d and Co., enterprise justification 25. The commercial or Co. v. Pulaski Furniture Furniture confusing logically is limitation the most (W.Va.1982) liability principle. S.E.2d 854 East River. If is irrational factor of dangerous, totally applied. River No economic East dangerous people will be even if damage only is recoverable results purchased by large corporations. can a How facility equipment machine or entire properly injected rule be remaining between one of the few faulty part part. is a which the constituent (or prevalent American more for- purchaser 5. East River—commercial —bar- eign) pop a mom small manufacturers and gain equal adaptation de- where the East River corporation family business or the farmer? The applied but nial rule is to commercial justified dangerousness in thesis of activity commercial distinguished consumer transactions acceptable as an risk lacks conceiv- buyer bargain- transactions and seller are logic. inquiry able It is here the of whether ing equals. lacking is a reme- there dy tort without Clearly, presented is the essential issue here jost visibly presented. The factual reeving brings block whether the failure Conti- justification principled for East River rests with category as the nental into a three standard seller-buyer relationship, the character of majority whether elects to rule or this court suggest justifi- application case tends to that the adopt appli- the fourth or River either fifth East concept ap- disregarded cation and the absolutely impossible It to tell from cations. plied even a "consumer" transaction if either succeeding East federal case law River bargainers equal or the are not in eco- exists authority category whether that finite four nomic muscle. *30 Obviously, admiralty most would five. cases consumer, analysis, damage likely In the commercial than academic economic be more 26. law, up case discussion in the whatever the difference be. decisions and line

673 Co., Dangers Washington B. Power 774 P.2d at Extraordinary Water —Cata- conclusion, In compared 1209. the court Majority Stan- strophic Event—The rejection: the reason for dard River, analysis The Court’s in East we providing The adjudication most recent believe, unjustifiably dismisses the safe- persuasion Washington is the the clearest ty product attendant injuries concerns Supreme Washington in Court decision by caused hazardous defects. For Co., 112 Graybar Co. v. Elec. Water Power reason, approach find East River’s we 847, 1199, 774 779 Wash.2d P.2d amended Leg- economic loss unsuited what the (1989),27 recognition of P.2d 697 in the islature intended under the WPLA. countervailing concept of East River. says, injuries, Product the Court do not That court defined East River: concerns, raise safety but are “essential- opinion, the Court assessed the ly” performance problem. of con- relative merits several different Id. P.2d at 1209. ceptions purposes economic loss. For of Washington Water Power Co. does not admiralty, law chose Washington While stand alone. court conception urge us defendants to used risk of harm as the basis economic adopt product under the WPLA. When a damage liability product, for a defective itself, damages only persons not or Oregon liability courts use a strict standard held, property, prop- other Court applies is “unreasonably if the defect contract, tort, remedy er lies in in not no dangerous user.” Brown West- v. product matter risk of harm the what Assoc., 470, Or. ern Farmers 521 P.2d poses, defect matter no how 537, (1974). v. See Heaton Ford Motor product injury Co., 467, occurred. 435 P.2d 806 Or. River, Since East the federal courts have Washington Water Power 774 P.2d at apply Oregon continued to law for di- Recognizing remedy 1208. denial of versity as by Bancorp cases shown Leas- might provide greater certainty, the Wash- ing Corp. Agusta and Financial Avia- ington rejected court East River: (9th Cir.1987). Corp., tion 813 F.2d 272 opinion, however, In our this increased Oregon Brown, basis of law certainty high price. comes If at too justification imposi- P.2d at 540 is for the successfully manufacturers can contract suppliers upon tion strict product injuries, around liabilities for products creating defective hazard principal practices— deterrent to unsafe life and health sale of a legal liability threat lost. be—will Oregon presents danger defect. differ- v. Kit Mfg. See Cloud 563 P.2d dangerously entiated this defective (Alaska 1977); Project 250-51 Salt River argument disappointed buyer, from the Agricultural Imp. Power Dist. v. & Gatlin, Price Or. 405 P.2d Westinghouse Corp., Ariz. Elec. (1965), product liability and denied relief to (1984); 694 P.2d Mid Continent which, purchaser of chicken feed al- Corp. Curry [Cy.] Spraying defective, though arguably was not unrea- Aircraft (Tex. Serv., Inc., 572 316-18 sonably dangerous. open S.W.2d court left 1978) J., dissenting). (Pope, unreasonably dangerous test whether In an even more case curious text is the and the economic sustained of Mulholland, pro- most case of N.W.2d milk herd and loss of recent milk generally Michigan appeals 340. The involved classi- A case what duction. court decision loss, Supreme fied court Court as economic differentiated affirmed the trial qualifi- direct economic loss rules were discussed. At reversed. The issue advised was alleged milking expert faulty system sup- issue It was an cation of the witness. is clear in case court, plied analysis, perceived the defendant. Purchaser sued for that the discussion design warranty, negligence breach of claim as well as was stated contract. expert validity to warn. manufacture failure An economic claims rejected unqualified witness was and a direct- tort seems to have been assumed the discus- granted generally ed verdict for defendant on failure of and decision which reversed the sion proof alleged faulty of casual relation between directed verdict.

674 251, (1971) P.2d and 184 applied persons or ] to be Wulff Sprouse-Reitz Co. Brown, property. 521 P.2d at applied to noteworthy special con- It is that the 542. P.2d at Id. Brown, in 521 P.2d at 543 based currence given the terms The relation between being “purely eco- denial of the claim on ability to the main damaged property and and,

nomic, profits” secondly, loss of the Illinois law was a tort action under tain was not “accidental.” Brown cited loss illustrated in Kishwaukee Communi well Co., Sprouse-Reitz Hospital 262 Or. Services Center ty Health Wulff Co., (1972), F.Supp. Equipment the Bldg. P.2d 766 defective where (N.D.Ill.1986). Kishwaukee Commu up house. blanket burned the electric analyzed the nity Health Services Center Brown, open issue left in 521 P.2d Illinois, Mfg. in case Moorman Co. v. lead danger- of attribution unreasonable 61 Ill.Dec. National Tank 91 Ill.2d only person property or also to ousness 435 N.E.2d That court said in resolved Russell v. Ford Motor was ap Mfg. could be read to Moorman Co. (1978) 575 P.2d 1383 as man 281 Or. (or more) prove one of three tests. The ” Certainly, reeving endangering. a block on is the East “bright line test—this River equally large crane meets the test with a there is recovery injury denial of unless housing the defective weld on the axle product beyond the a suit —allows Russell. damage anything other the than involves premise responsibility the itself. The Insofar as the “commercial ex ” test suit in tort if marketing pectation allows a the dangerously de- for the of a damage product’s failure caused norm for fective states a the unexpected. danger The “sudden and seller, norm either producer has ” test allows a suit in tort if the dam ous not at time or has been met age suddenly dangerously. occurred product is sold. Whether the seller has Community Health Kishwaukee Services responsibility depend met this cannot Center, F.Supp. at 1497. Under Wash damage the fortuitous extent of the done law, categories ington and three two would danger created defect harm. fall as character risk of The fed subsequently Moreover, pass. comes to judge Community eral Kishwaukee plaintiff damage if a able to trace Center, F.Supp. Health Services negligence, may seller’s he to the recover post-East exception under a River for economic of a kind that the losses Appeals, Seventh Circuit Court ob should have seller been able foresee. appears served Seventh Circuit “[t]he P.2d at Id. 575 1386-87. bright reject line test favor of a again distinguished That court expectation between approach commercial and to be endangered disappointed user and the one: in its undecided views toward sudden dangerous test.” his premise also controls a conse- its extent. loss must be complicated This ease becomes because quence danger recovery of the kind of and occur judge reject seems to circumstances, permitted the kind of “acci- River under East would have dam- not, Obviously, age property. to other the condition of dental” made economic to other liability. a basis for strict linguistic adaptations found on within distinguishes eco- This such a loss from subject in these cases. Kishwaukee poor per- due only nomic losses Community Center Health Services is one or the resale value of formance reduced cases of the few where is denied defeptive, dangerously even defec- permit- and which East would have River tive, product. It is the distinction be- ted. disappointed tween users Price Brown, endangered ones in Mfg. Co., N.E.2d Moorman 443 is Corp. compatible Washington Brownell v. White Motor Or. Water Power [260

675 (1986) non-prod 1022 clarified that for a N.E.2d Co., 1199 it is cited 774 P.2d recognized property damage did not come within not Kishwaukee Com- uct result The ma- of non-recovera munity Center. the economic loss doctrine Health Services Co., 435 N.E.2d at jority Mfg. damage. in Moorman The nature of the ble economic denied relief the defect was empha where dangerous fire sudden and was to the qualitative and the harm related applied sized. The economic loss doctrine expectancy pur- of fitness for consumer damage adjacent fire tenants neither to pose: Montgomery deny nor to contribution to against policy considerations al- against equip Ward & Co. the fire service lowing recovery solely loss for economic supplier. Lack of an accident in wa ment apply negli- in strict cases punitive damaged apartments ter denied gence actions as well. When the defect damages for tort claim Morrow v. qualitative is of a nature and the harm Inc., 112 L.A. Goldschmidt Associates expectation relates to the consumer’s 87, 939, Ill.2d 96 Ill.Dec. 492 N.E.2d 181 particular quality that a is of a (1986). workmanship Similarly, faulty use, contract, ordinary so that it is fit for damage occurring from a sudden tort, provides appro- rather than law dangerous bespoke occurrence priate recovery. set of rules denial within the economic doctrine That court further observed: Townhome Owners Ass’n v. Foxcroft 150, Corp., 96 Ill.2d The demarcation between Rosner physical Hoffman 251, (1983). property damage Ill.Dec.

harm or on the one 449 N.E.2d See 171, economic loss on the other Ohlendorf, hand and Redarowicz v. 92 Ill.2d usually depends 411, (1982). on the nature of the Ill.Dec. 441 N.E.2d 324 the dam- defect and the manner which recognition likewise the of the difference age occurred. and sudden and ca between deterioration damage, Chicago Heights lamitous Ven respectable authority Id. at 449. Cited as America, Inc., Dynamit ture v. Nobel Co., 248, Mfg. 563 P.2d was Cloud v. Kit of (7th Cir.1986)(Illinois law), in 782 F.2d 723 (Alaska 1977), originated finding qualitative loss economic within sudden and calamitous factor. reducing expectation the consumer’s special defect Mfg. concurrence Moorman Co., defining product’s of a fitness. questioned 435 N.E.2d at 455 appear- economic on loss based absence or admiralty com rule East River physical judge ance of harm. That made pared standards of state law which, true, interesting may comment responsibility City defined was account for the obvious trend toward the Co., 827 F.2d Greenville v. Grace & W.R. Washington Power 774 P.2d Water (4th (1987), reh’g denied 840 F.2d 219 concept. 1199 risk of harm Cir.1988), provided authority further One should not have to choose wholesale Co., 774 Washington for the Power Water Karagheu A M between Santor v. & City P.2d 1199 differentiation.28 Green sian, (1965), 207 A.2d Inc. N.J. supplied fireproofing for ville Monokote (1965), Seely Motor v. White Co. city af hall construction. Six months 17; 145, Cal.Rptr. 63 Cal.2d 403 P.2d developed ter the manufacturer an asbes adopt proper approach I believe the is to product, supply tos free it continued to the valid concerns behind each. danger old Monokote which contained Co., 435 N.E.2d at 456. Mfg. Moorman material. The circuit court ous asbestos judgments affirms for both ac Montgomery substantial Scott & Fetzer Co. Ward punitive 112 Ill.2d 98 Ill.Dec. 493 tual and on a & particular beyond City academia the real world. Product lia- Greenville should have bility problems present pertinence City Casper contra-indicate and where a and asbestos opinion major high school closed and school ses- demonstrate that a real world exists Comment, See, however, put split con- discussion. Asbestos in sions shift because asbestos Doctrine, recently building. and the Economic Loss tamination discovered in the Schools jurists U.Chi.L.Rev. 277 It seem sometimes that write searching the interac resulted. largely in- turbine

liability basis. East River was law, injury or the court lacking of tort and contract apposite when claim tion proper other injury persons limitations where threat for definitional reached *33 in Conversely, contained ty. damage the asbestos product recovery for internal tort “product material was sulation [which] in the loss The manner which might occur. and unreasonable threatens a substantial in considered whether occurred was next * * Greenville, City risk of harm calamity. of or accident the defense F.2d at 978. It was noted 827 of the de- was the nature Differentiated no that justified could not be basis poses way in a an fect as defective “yet developed an asbestos-related one had danger that use or to those unreasonable at 978. also Board disease.” Id. of not fit for it or found to be consume S, Inc., A, Chicago C & City v. Educ. of purpose unreasonable the intended without 643, 737, 121 Ill.Dec. 525 Ill.App.3d 171 person prop- danger causing injury to or (1988), school which is also a N.E.2d 950 type erty. Last then considered was Comparable to case. asbestos material recog- damage. The Arizona court loss or City is 2000 Watermark Greenville mere- explosion the fire and was “not nized Ass’n, 1183 Corp., 784 F.2d Inc. Celotex ‘non-dangerous ly a commercial defect or Cir.1986), (4th asphalt shingles were where ” quality’ recognized and impairment of poorly dangerously manufactured but endangered persons property and other shingles might The not shed and installed. pro- tort law from the accident for which long good look so as desired the rain so nor River proper vides a rationale. Salt blistered, they expected did and Dist., 694 property.29 Project Agr. Imp. and Power not threaten life or other (quoting Posttape P.2d at 210 Associates product Washing The failure similar to Co., F.2d Eastman Kodak Co., P.2d ton Power Water Cir.1976)). (3rd Project Agr. Salt River Imp. litigated Project Agr. in River Salt also cited Imp. and Power Dist. Arrow Westinghouse Elec. and Power Dist. Die- Leasing Corp. v. Cummins Arizona (1984) Corp., 143 Ariz. 694 P.2d 198 (1983) sel, Inc., Ariz. 666 P.2d 544 claiming tort of a commercial seller Cloud, court 563 P.2d at 251. That buyer. pur to a commercial The district “[wjhether major item determined then generator gas chased a turbine to property damage is classified as a loss operat proved problems within its have property plaintiff or a loss other ing computer. A course of P-50 trouble itself, product [plain- only to the defective purchase a manual control lead to the * * has a claim in tort *.” Salt River (Local Controller) unit. LMC Maintenance tiff] Dist., Agr. Imp. and Power Project The LMC malfunctioned when installed and P.2d 210-11.30 The court Salt River million dollars to the entire 1.9 injury repair part the defective does not re- A which caused a 29. substituted used resulting engine explode quire respect converted aircraft severe esting by-play rule with to econom- different engine produced an inter ic To deviate from the basic rule would loss. majori expression between the speculation inquiry unrelated to lead ty minority in Consumers Power Co. v. negotiations between the commercial enti- (3rd Curtiss-Wright Corp., F.2d 1093 Cir. ties. 1986). majority said: concept fortuity proper 1102. How is a Id. at pure fortuity explosion that It is that the consequent defining exploding motor and engine scrap reduced Consumers Power’s unexplained. persons property risk to damage any person property near- did not by. compressor disc did not The defective analysis draw the line between con- 30. In its merely efficiency or a decline lead to a loss of tort, developed the Arizona tribunal tract and sudden, profits; the disc’s failure caused a hypotheticals problems to illustrate the ad- five posed accident which violent and calamitous hypotheticals, all a new LMC dressed. five property. persons a serious threat to damage unreasonably dangerous and undis- unit with an explosion caused previously installed in the covered defect was damage, not economic loss. Subsequently, purchased' the unit turbines. Id. at The dissent then said: causing the losses and malfunctioned injury fortuity personal or outside illustrated: might property damage occur in addition to princi- the same Virginia followed then West Power Dist. Agr. Imp. and Project precedent review of nationwide ple after appar- contention which explored a further Furniture Co. v. Pula- statement Star possible denial of tort here of ently arises 297 S.E.2d ski Furniture The court user. remedy to a commercial (W.Va.1982): for commercial justified no reason found to the defective Physical harm right differentiation user-consumer belongs principles; tort reduction remedy access. flaw merely because value Power Co. Salt Washington Water See, e.g., into contract law. Gherna falls Imp. Power Dist. Project Agr. River Cal.App.2d v. Ford Motor *34 approval cited with and followed both (1966); Cal.Rptr. v. Reli Gibson Alaska, subject on this from name case (Mo. Chevrolet, Inc., 608 S.W.2d able 248, Cloud, progeni- is the 563 P.2d Co., App.1981); Russell v. Ford Motor recovery rule the economic tor of 587, 575 P.2d 1383 281 Or. danger exists from unreasonable where Therefore, reject the line of cases we Cloud, rug pad ignit- faulty products. In a Karagheu M begun by v. A & Santor destroyed the ed and caused a fire which 52, sian, Inc., 44 N.J. 207 A.2d 305 filed in theories of trailer house. Suit was (1964), permitted use of strict which have implied liability, negligence and war- strict difference be liability to recover the recognized That first ranty. court of the received tween value personal physical injury property and purchase price in the absence of a and its adapta- similarly treated should be See, e.g., event. Cova sudden calamitous liability litigation. tion of Motor 26 Mich. Harley Davidson distinguish question then was to between 602, (1971); Air App. 182 N.W.2d damage. property and direct economic loss Chemicals, Products Inc. v. Fair & court, terms, adaptation defined Inc., Morse, 58 Wis.2d banks and calamitous would that sudden (1973) Pennsylva (applying N.W.2d always property damage almost result law). Virginia, property nia West deterioration, distinguished as from inter- products which re damage to defective breakage depreciation which that nal event is from a sudden calamitous sults sud- court defined as economic loss. The cause under a strict recoverable den, justified merely Damages and calamitous harm which result violent of action. bargain” are outside damaged for the trailer house of a “bad because liability. scope of strict and its contents. gas plant was down four of the turbines. the defect caused the LMC to

At Plant # result, engi- plant [plaintiff] twenty-four malfunction at a time when the hours. As a inspecting aloft on a catwalk one of electricity neer was to its numerous could not deliver by the LMC. The the turbines controlled users. [Plaintiff] and residential commercial (accident) resulting explosion force anticipated profits only lost all the floor, engineer injuring to the knocked the replace but must to those consumers the sales him. lawsuits some of its LMC and faces #2, At Plant the same malfunction affected large users. commercial turbine, accidentally caught one Dist., Project Agr. Imp. and Power Salt River completely destroyed. fire and was P.2d at 208. #3, LMC to the defect caused the At Plant illustration, the court found unani- From department The fire malfunction and burn. responded quickly, plant one authority mous the turbines or so none of recoverable, split of au- plant were two the LMC was located near other thority plant the unrea- three determined damaged in the accident. application sonably dangerousness rule in engineer plant discovered the At Plant # majority denial of eco- rejection, rule for and a down and was able to shut defect in the LMC plants and five. The tur- losses in four nomic replace LMC before the turbines damage Project Agr. Imp. and Power Salt River bine in However, the LMC re- occurred. reeving in Continental have block Dist. and the $50,000, [plaintiff] placement includ- cost to hypotheticals placements within the identical shutdown, testing start-up ing costs. dependent on defini- plant #5, three occurrence period, during peak demand At Plant property.” tion of "other to start all malfunctioned and failed the LMC Star age resulting Furniture Co. was followed “from a sudden calamitous request federal court certification in Bas event” which is recoverable under Star — Shale, ham v. General 377 S.E.2d 830 Furniture, —, W.Va. at 297 S.E.2d (W.Va.1988),where the defective bricks in at 859. produce deterioration did not required Id. at 313. calamitous event. Cloud, Alaska's 563 P.2d 248 was also analysis, In a most recent the West Vir- Georgia followed in for a federal certifica ginia effectively directly court con- question tion in Vulcan Materials Inc. sidered East River Star Furniture Driltech, Inc., 251 Ga. 306 S.E.2d Michigan Co. where a 475B front-end load- 253, (1983) (quoting Flintkote Co. v. er up by was burned an alleged hydraulic Corp., (11th Dravo 678 F.2d Cir. system (comparable fuel leak 1982)): pump example, fuel infra). Capitol Fu- “The prevents economic loss rule recov- els, Inc., 382 S.E.2d 311. The strict liabili- ery in tort when a defective has ty buyer based verdict for the for the value resulted in the loss of the value or use of destroyed machine was affirmed. sold, thing repairing the cost of it. That court continued its posi- “intermediate *35 * * circumstances, Under such duty tion, *, recovery permitted where is for generally breached is a contractual one product a defect in the if it dangerous is and plaintiff merely suing for the destroys users and product in a * * bargain. benefit of his The rule does not event, sudden calamitous Id. at prevent a tort action to recover injury for property to other persons because appears What obvious from Star Furni generally breached arises inde- ture is that under bargain” the “bad pendent of the contract. Nor does it concept, product the fact that may preclude recovery damages to the defective, flawed or such that it does not product itself, inju- where the defective purchaser’s meet the expectations or is ry (Foot- resulted an accident.” even defect, unusable because of the omitted.) note (Emphasis supplied.) does not mean that he recover the Co., also v. Watkins product value of the Barber-Colman under a strict liabili Inc., (5th Cir.1980), 625 F.2d 714 ty in theory. purchaser’s where reme injuries dy through Comparable resulted. Uniform result is Commercial — City Code. Franklin Lancaster, Badger See Kesner v. v. Ford Truck Sales, —, Inc., 641, 58 Wis.2d (1989).

W.Va. 378 S.E.2d 207 649 In N.W.2d 866 (1973), although order to recover Furniture, under the court did Star not make a specific the damage product finding to the dangerousness must result of wheels from a sudden that fell engine calamitous event off of a fire attribut when it was dangerous able to the being design defect or driven around a corner. Confusion itself. in terminology again recognized in Cova Harley case, Co., In Davidson Motor this 26 we reaffirm Mich. our decision 602, App. (1970) 182 N.W.2d 800 Star permitting Furniture. The front-end loader tort recovery for merely damaged product was not ineffective perhaps profits not loss of in consequential failed to meet the customer’s ex- damages. See, pectations. however, A Mulholland, defect in the front-end 443 abrupt loader caused an N.W.2d 340. City fire La which con- Crosse v. Schu bert, tinued to Associates, Inc., burn until the Schroeder loader was de- & 72 38, stroyed. operator (1976) Wis.2d 240 the loader N.W.2d 124 es- followed caped injury. Franklin, without City The defect in the 207 N.W.2d 866 in tort loader created a potentially property for other front[-]end as well as the dangerous faulty situation and the damaged risk associ- Cova, roof. 182 ated with the defect was not one N.W.2d ordi- 800 was also approval. cited with narily contemplated by purchaser. Compare Sunnyslope Grading, Inc. v. Mil Clearly, this type is the property ler, dam- Risberg, Inc., 148 Bradford

679 opinion, it analysis. In recent (1989), case 910, 213 where 437 N.W.2d Wis.2d Corp. in National Crane by quotation not an issue and dangerousness was said Co., 782, the nature of the Steel Tube premised on 213 Neb. v. Ohio decision was pure eco (1983) transaction as commercial to be followed N.W.2d warranty terms loss where adverse Inc., nomic Mfg., Haybuster 215 Neb. Nerud Grading, Inc. Sunnyslope existed. (1983): 340 N.W.2d danger unreasonably distinguished that have con- majority A of courts Farms, Tony Spychalla applied ous rule liability of strict applicability sidered Co., Hopkins Agr. Chemical Inc. v. prod- defective to recover (App.1989). 444 N.W.2d Wis.2d use of the doc- permitted itself have uct danger unreasonable Defectiveness trine, oc- least where his was the to the user or ousness sudden, violent as a result of a curred applied for tort test of an inherent and not as a result event po sprout suppressant purchased value property’s reduced the defect that judg and affirmed after an awarded tatoes inflicting physical harm without $227,050 crop damage. ment of Co. v. Pu- product. See Star Furniture product was potentially hazardous Co., 297 S.E.2d 854 Furniture laski Pennsylvania in Industrial recognized in essence, (W.Va.1982). court has Co., International Rental Inc. v. Uniform reached the same result. See Morris Co., A.2d Pa.Super. Harvester 341, 303 Chrysler Corp., 208 Neb. REM overruled sub nom. (1983), N.W.2d Equipment Inc. v. Clark Coal decision, the law (Pa.Super.1989), but the Ohio Su A.2d 128 In most recent A M today less than defini v. & state seems Santor preme of that forsook a *36 Court analysis in Inc., Compare federal court 52, Karagheusian, tive. 44 N.J. 207 A.2d Corp. v. Cater Pennsylvania Glass Sand (1965) no further posture, but moved 305 (3rd Co., F.2d 1165 Cir. pillar Tractor 652 Cloud, fortuity P.2d 248 than the 563 Equip Aloe Coal Co. v. Clark 1981) with Ad Chemtrol dangerousness status. Cir.), Co., cert. (3rd 110 ment 816 F.2d hesives, Ins. Inc. v. American Mut. Mfrs. 156, 853, 108 S.Ct. 98 denied 484 U.S. Co., 40, N.E.2d 624 42 Ohio St.3d 537 However, (1987). in the latter 111 L.Ed.2d (1989). Lacking an unreason a defect with case, dangerous nature of the unreasonable harm, not strict would risk of able issue.31 not a considered defect was Corp. Allen however, Mead v. See, lie. Co., (N.D. Ins. F.Supp. 465 355 dale Mut. employed the court has The Nebraska Anderson Concrete 1979); Iacono v. dangerous test in discussion Ohio unreasonably Co., Co., F.2d at 118. See likewise Aloe Coal 816 F.2d at 119 court in Aloe Coal 816 31. The Cir.1988), (3rd Hilton-Davis, Corp., King F.2d 1047 (quoting S.S. 106 S.Ct. 855 East River v. — 839, U.S. —, 2303), making conclusion" or its "studied S.Ct. 109 rt. denied ce 102 guess,” accurately related an “educated (1989). more While this dissent L.Ed.2d 971 trudge analysis, murky present our that ‘‘[i]n Superior publication, preparation gives way through sophisticated to an nuances Co., Pennsylvania REM Coal released Court flight Damage to a to basics. unencumbered Co., (Pa. Equipment 563 A.2d 128 Clark Inc. v. simply the customer has product means Co., 1989). Super. Inc. follows Aloe REM Coal That value.’” received ‘insufficient Co., court F.2d 110 in intermediate Coal 816 recognize that our con related “[w]e court also Johnson, A.2d 1317 and Industri 502 reversal congruent be considered clusion Co., Inc., 463 A.2d 1085. Rental al Uniform Pennsylvania interme cases in the two recent probably Pennsylvania remain unset law will * * * pronounce appellate These court. diate supreme progression until the tled in historical than our task more uncertain ments have made whether and how state determines court of that be, yet us do not dissuade would it otherwise per or East River follow far it will follow in review of In our ultimate conclusion” Alaska, Washing the lead cases from suasion of 1085, Co., Inc., A.2d Rental 463 dustrial Uniform considering dangerous Virginia in West ton and Corp., Pennsylvania Glass Sand which embraced e.g., Washington catastrophe, and sudden ness Motors v. General F.2d 1165 and Johnson 652 1199; Cloud, Co., P.2d 563 Power 774 147, (1986), Water Pa.Super. 1317 Corp., 502 A.2d 349 Co., 248; S.E.2d 297 Co., and Star Furniture P.2d Inc. v. Clark sub nom. REM Coal overruled Co., (Pa.Super.1989). Equipment 563 A.2d 128 680 Group Curry Ins. v. 88, (1986); Corp., 42 882 326 N.E.2d 267 Ohio St.2d Hartford Inc., Service, Direct Eco Note, 119 Recovery Sales & (1975); Chevrolet Questions (1986); nomic Loss: Unanswered 546, 500 N.Y.S.2d 720 A.D.2d Law, Liability Products Ohio Case Elgood Mayo v. Const. Co. Schiavone (1977).

W. Res. L. Rev. 683 720, 667, 451 N.Y.S.2d Corp., 56 N.Y.2d v. (1982). Graham 436 N.E.2d 1322 Cf. Jersey “readjusted” The New court 1128, Corp., 135 A.D.2d Rockwell Intern. Santor, posture originally adopted in (1987) (dissent which com 523 N.Y.S.2d rule for A.2d 305 to create a differentiated factually those pared the case with where commercial transactions where tort reme bargain issues were the benefit denied for the economic dam dies would be presented, e.g., Hemming Certainteed age internal defects and loss Distributors, Spring Corp., Motors Inc. v. Ford 976, 97 A.D.2d 468 N.Y.S.2d 789 Co., 555, (1985). Motor 98 N.J. 489 A.2d 660 (1983)). damage also other economic See However, recent neither that case nor more dangerousness clearly cases where neither Jersey opinions from New have addressed occurred, Krzys nor calamitous events danger the risk of harm-unreasonable Co., Inc., American Honda Motor subjects calamitous event which are now 947, (1986) A.D.2d 508 N.Y.S.2d 355 Amboy also Perth before this court. Harvester, Cayuga Inc. v. Allis-Chalmers Works, Home Iron Inc. v. American As 5, Corp., 95 A.D.2d 465 N.Y.S.2d 606 Co., 200, sur. N.J.Super. 543 A.2d 1020 (1983). (1988). Dreier Inc. v. Unitronix Cf. convergence provides of three cases Corp., N.J.Super. 527 A.2d 875 posture perhaps California which is (1986). subject different economic dam- considered, Within the volume of cases ages resulting from the duplication in an almost exact kind of perhaps itself than exists equipment damage occurred in John R. Corp. other state. These cases are J’Aire Const., Dudley Mfg. Inc. v. Drott Gregory, Cal.Rptr. Cal.3d A.D.2d 412 N.Y.S.2d 512 (1979); Cronin v. J.B.E. 598 P.2d 60 suddenly collapsed crane in boom without Corp., Olson Cal.Rptr. 8 Cal.3d jury people property. to other *37 433, (1972); Seely v. 501 P.2d 1153 inquiry product liability The first strict was Co., 9, Cal.Rptr. White Motors 63 45 Cal.2d recovery, although only property dam 17, (1965). In Seely, 403 P.2d 145 Justice age was to the crane itself. The court Traynor counterpoint initiated the rule to distinguished bargain the benefit of the Santor, directing 207 A.2d 305 recourse Santor, by cases demonstrated 207 A.2d Seely did contract. not resolve nor con- granted by 305 and relief virtue of the unreasonably dangerous, sider the non-acci- collapse nature of the accidental and dan divergence developed per- dental later gerous alleged product character of the recovery clearly mitted in tort as now most Const., Dudley John R. Inc. was defect. Washington Water Power identified in followed a number of New York eases Co., Cronin, 774 P.2d 1199. 501 P.2d 1153 scope princi which defined same requirement prod- deleted the in California Washington Water ples later enunciated in prove uct cases to the factor of Co., 774 P.2d Power 1199 and somewhat See Recent unreasonably dangerousness. Cloud, earlier in In 563 P.2d 248. confine Liability Products Development, principle support ment of the involved —Strict Liability in Tort: Need Not Ren- made, see Schiavone the decision Defect “Unreasonably Dangerous” der Product Elgood Mayo Corp., v. Const. Co. 81 Corp., —Cronin v. J.B.E. Olson 221, (1981), 8 Cal.3d rev’d A.D.2d 439 N.Y.S.2d 933 121, 433, 667, Cal.Rptr. 720, 104 501 P.2d 1153 56 N.Y.2d 451 N.Y.S.2d 436 (1972), (1973). See (1982), Silverman, J., 49 Wash. L. Rev. 231 N.E.2d 1322 dissent Co., Inc., Engineering also Barker v. Lull ing, Trustees of adopted with dissent University 413, 225, Exposaic Columbia Indus Cal.Rptr. 20 143 Cal.3d 573 P.2d tries, Inc., 747, Corp., (1978). 122 J’Aire pro- A.D.2d 505 N.Y.S.2d 443 598 P.2d 60

681 ages judgment from a based on strict recovery of eco- owed territory for a broad vided warranty as- liability, negligence and law, in- damages California nomic under subrogation buyer. signed its claims to implied contractual cluding contractual Here, paid Continental negligence as claims. proceedings as well subrogation buyer. claim from the took the cases; faulty these three In result has, damage litigation internal Minority Adapta- The East C. River — commentator, by one tended expressed tions. contractual targeted within theories of contrary minority posture Recovery Neg- Rabin, has been Tort adaptation. adopted by do not A Reas- some states which follow Economic Loss: ligently Inflicted Washington injury risk of status of (1985). sessment, L. 1513 37 Stan. Rev. Co., 774 P.2d 1199 or its Water Power Col- Franklin, however When Worlds See constituents of calamitous events or unrea Liability Theories and Disclaimers lide: danger. Apparently, sonableness of five Cases, 18 Stan. L. in Defective-Product law, case do jurisdictions, most recent (1966). Rev. 974 follow East River through calamitous California, per economic danger event and unreasonableness the eco mitted in actions where to tort claim denial. from the especially despite nomic loss is foreseeable jurisdictions These include Missouri as de physical injury the absence Sharp Contracting Bros. Co. termined Intern., damage. Ales-Peratis Foods Inc. n Co., 703 v. America Hoist & Derrick Co., v. American Can Cal.App.3d 164 (Mo.1986), cre 901 with the decision S.W.2d (1985). Consequently, Cal.Rptr 209 opinion mem ated the court’s of two upon the case is balanced a result bers, specially concurring two members clearly rather than the foreseeable dissenting. The dis and three members unreasonably danger product which was occurrence diver sent noticed the violent Leasing, 146 ous. Pisano v. American law. previous gence from Missouri Cal.App.3d Cal.Rptr. 77 Chevrolet, Inc., v. Reliable Gibson Corp. however, Kaiser Steel Compare, (Mo.App.1980), which cited S.W.2d Corp., Westinghouse Elec. Cal.App.3d Cloud, approval 563 P.2d 248 with (1976); Gherna Cal.Rptr. Clevenger Wright recognized Ford Motor Cal.App.2d Products, v. A.O. Smith Co. Harvestore and Fentress v. Van Inc., (1966); Cal.Rptr. 94 (Mo.App.1981), the 625 S.W.2d 906 Motors, Supp. Etta Cal.App.2d external tor was not an calamitous event (1958).32 P.2d 227 Sharp Bros. opinion nado. The court’s incongruity law and of the California apparent Contracting 703 S.W.2d 901 logical validity setting commercial to a posture ly adopted the conservative *38 GEM dichotomy currently is illustrated consideration Dean Keeton and denied Di- Developers v. Homes San a factor. an accident should be whether Hallcraft Inc., 419, Cal.Rptr. Keeton, ego, Cal.App.3d 213 261 Prosser and W. Law W. (1989). 1984). carefully (5th justice 626 That case should be ed. Another Torts 81§ Contracting Sharp Bros. adaptation Califor- in concurring before reviewed agreement by Co. currently pursued justify is found a basis for virtue nia ease equal significant differ- commercial nature and bar majority opinion. The of the participants. The Developers gaining power of the ence GEM in is the insurance engendered by the decision as to loss dam- confusion paid part carrier of the economic N.J., Co., 4, Distributors, at Corp., Inc. v. Ford Motor 98 S.S. 476 U.S. at 869 n. In East River A.2d, 672, Jersey court- Supreme at the New n. the United States 106 S.Ct. 2301 Jersey rejected and Califor- Santor the commercial context. Court took notice New in developments: Corp. Gregory, nia J’Aire v. 24 Cal.3d And in (1979), Cal.Rptr. 598 P.2d Jersey Interestingly, the New and California recognized a cause of action ap- California court Supreme what Courts have each taken negligent prospective with ec- step interference pears of the other to be a in the direction advantage. Seely. Spring In Motors onomic since Santor and by Minneapolis followed Soc. and was of the violent occur exclusion whether to commercial and Associates Ar related both Arts v. Parker-Klein rence factor Fine recog cogently purchasers (Minn.1984). consumer The chitects, N.W.2d 816 Note, Ordinary Consumer nized in Is again adaptation was followed denial tort and No Damaged Product aWith Aerospatiale Co. v. Groves & Sons Left S.J. Mo. L. Rev. 961 Remedy?, 52 (Minn. N.W.2d 431 Helicopter Corp., 374 collapsed. In dis appears 1985), helicopter to have state where a The second although the posture, adopted the same sent, majority recognized that it was “[t]he in the cases leaves sporadic, adaptations Corp.] to language {Superwood reads this certain, is Minne this conclusion far recovery types those of dam prevent . Corp. Superwood The lead case was sota involving ‘sudden ages, even cases 311 N.W.2d 159 Corp., Siempelkamp v. holding puts calamitous events.’ Such responded (Minn.1981). Corp. Superwood very minority. much in the Su- Minnesota cylinder where the to a federal certification intended such result.” Id. perwood never premise failed. The plate press aon hot also follows East at 435. Alabama out of the remedies arose denial of tort rule, Coal Co. v. Clark Lloyd River Wood the transaction. nature of commercial (Ala.1989); Co., 543 So.2d 671 Equipment question of a calam Corp., the Superwood Motors Dairyland Ins. Co. General dangerousness exceptional itous event or (Ala.1989). Corp., 549 So.2d Super- product was not considered. Fire Corp. was followed St. Paul wood follow the The fourth state Inc., Jac, Steeple Ins. Co. v. and Marine or at least the dissent persuasion, same where, (Minn.App.1984), 352 N.W.2d 107 so, through Texas Mid the case thinks litigation, following a win with like result Corp. Curry Coun- Continent Aircraft washing collapsed had without dow unit Service, Inc., 572 ty Spraying S.W.2d property damage. personnel injury or other (Tex.1978). difficulty perception majority of appellate court noted “[t]he minority majority and the cited both Seely follow exclude jurisdictions approval, Nobility Homes same case with economic loss dam from the definition of Shivers, Texas, 557 S.W.2d Inc. of (Tex.1977), unreasonably dan ages arising from clearly recognized unrea- They characterize these gerous defect. permitting sonably dangerous criteria physical damage physical damages as by the decision involv- claims. At this time Damages by defects which injury. caused ing Equipment Co. REM Coal Clark are de unreasonably dangerous are not Co., 563 A.2d 128 Equipment Inc. v. Clark (empha at 109 fined as economicloss.” Id. Pennsylvania (Pa.Super.1989), the law omitted). original and footnote sis recognize To the com- similarly directed. Superwood court said it had to follow plexities, compare Construction Associ- denial, thought Corp. the United ates, Equipment Fargo Inc. v. Water clarify Supreme should their States Court (N.D.1989) Frey 446 N.W.2d 237 Marine Ins. opinion. Paul Fire and St. F.2d 128.33 dangerousness Dairy, provided no issue Co. 544; Leasing Corp., significant 666 P.2d Sacramento Re of cases

33. There are a number Flxible, gional Cal.App.3d of economic where denied Dist. v. Transit clearly (1984); the unachieved bene were either within Cal.Rptr. 736 *39 Kaiser Steel 204 exceptional bargain classification or 838; fit of the Light Corp., Cal.Rptr. Florida Power & 127 dangerousness con did not exist or was never 899; Co., Har So.2d Clark v. International 510 by litigants appellate court. Twin sidered the Co., (1978); Idaho 581 P.2d 784 vester 99 Inc., Tractor, Disc, Big Bud 772 F.2d 1329 Inc. v. Co., Chrysler Koplin Corp., N. & Inc. v. 49 Alfred law); (7th Cir.1985) (Wisconsin Purvis v. Con Ill.App.3d 364 N.E.2d 100 7 Ill.Dec. Co., (4th Energy 674 F.2d 217 solidated Products Production, (1977); Agchem Inc. v. Divi Prairie case, law); Cir.1982) (diversity Carolina South (Ind.App. Corp., N.E.2d 1299 sion-Pennwalt 514 Co., (California & 587 F.2d 1363 S.M. Wilson 286; McGhee, 1987); Clevenger N.W.2d 296 Associates, law, case); diversity Posttape 537 906; Hagert Wright S.W.2d v. Hatton 625 case); (law diversity Pennsylvania, F.2d 751 of Commodities, Inc., (N.D.1984). 350 N.W.2d 591 1471; F.Supp. Engineering Arrow Hart 593

683 pump. Supply fuel Nicor ed the installed PROPERTY V. OTHER proof Ships lost on a lack of on failure (FOR OF ANY EAST APPLICATION post-sale tort thesis.35 to warn RULE) RIVER charterer, Digicon, as the time was Re- aspect of case remains. A final this hy appellate granted right the decision subject, alistically, this at least for this put pursue damage for had loss or what support can case not found court claim ship profits loss of from inabili- on the the other issues in its decision. We still ty property” “other the use this unless of what need to consider the determination loss. In dis- entire installation was a total part property is a constituent other when tinguishing Dreyfus the case from Louis equipment malfunctions and causes 27,946 Corn, Corp. Tons 830 Long general damage. Specifically, this is (5th Cir.1987), F.2d 1321 where loss of car- up of the present case where the break occurred, go not had other reeving destroyed block the crane boom. Supply Ships court Nicor Associates warn, no On this court had almost informatively analysis prece- added for non- authority support its decision. On dential value: recognition the risk of harm differentia- parenthetical description In a anoth- damage limi- recovery tion from economic case, footnote, er in a contained tations, clearly present minority was view recently Employers stated in Ins. court However, definition of selected. here on Spa v. Suwannee River Wausau argue I is property, other would what (5th Lines, n. F.2d 763 16 Inc. [866 if oth- probably an academic attainment Cir.1989) cargo not that the “loss of ] followed, proper er rules were but ab- damage property’ to ‘other within [the] thereof, minority among posture sence That meaning East River.” state- many cases.34 upon ment relies a similar observation Currently for an River illustrative East opinion Dreyfus our earlier Louis (admiralty) approach Supply is Nicor 27,946 Long To Corp. v. Tons Corn. Associates, Ships 876 F.2d 501. The issues all, degree, if at that these state- singular of the case and the amount suggest ments additions damage arguably by faulty were caused are vessel involved this case not “oth- pump ship. fuel off-shore basic dicta, they er not property,” are obiter supply ship was modified structural They explain precedent. may help to changes costing than million dol more 7.8 opinion in particular rationale of lars the time charterer who was then uttered, they they do were engaged in mod seismic activities with the bind us as the law of the circuit. ship. ified A fire at sea caused more than Associates, Ships 876 F.2d Supply Nicor damage two million dollars to the vessel omitted). (footnotes at 506 eight damage million dollars about justification limited equipment. Sup The review the installed Owner Nicor dangerousness and ply Ships probability of calam- Digicon and charterer sued Gen part Corporation produc which had itous event circumstance whenever a eral Motors Trucks, Inc., Concrete, provide easy Fondyce Inc. Mack 34. A number of cases factual also causing (D.Kan.1982) F.Supp. Wulff, to the defective answer to property categorization. Hales v. Green recoverability other P.2d 766. The differentiation of Colonial, Inc., (8th Cir.1974) (de- 490 F.2d 1015 drag bucket on the line and the between the building); up Largoza, 538 fective heater burned destroyed ground wheelbarrow on caught (refrigerator F.Supp. fire and reeving disintegrates. See Firestone block Romano, house); (tele- up A.2d burned Hall, Ga.App. Tire & Rubber Co. house). exploded set and set fire to the vision (1979) (defective destroyed tire S.E.2d 449 truck). clearly was concrete mixer Not so identified fell off of truck chassis and caused suc- to both the chassis and mixer. A Industries, F.2d and McCon- Miller neg- under *40 cessful claim made nell, inap- F.Supp. consequently were damage. Fidelity ligence for States & all United plicable presented as evidence. a matter of Equipment Co. v. Truck & Concrete Guar. (1970). St.2d N.E.2d 380 21 Ohio here, However, the decisive where as significant contingent of the damages a of the occurrence factor is the character may, I that as it remaining machine. Be product. in the the nature of the fault rights recovery convinced that remain followed should include The standard by the accident of the should not be defined recovery damage incurred. for all however particular part company of installation of a linguistically improper and I find it to be operational machine. How on should damage logically unsound to call the crane the furnace control unit differ whether reeving economicloss after the this case the furnace or was later install came with apart dumped came boom block if malfunction and cause ed thereafter to significant Undoubtedly, unit. there were furnace, damage the entire to the entire additional economic losses sustained from injury the owner or house house or repair complexities, but down time and reeving If had been occupants? block part these costs were neither claimed nor a replaced by Ajax or Ho-Hum Manufactur damage litigation. of this two million dollar damage, why ing resulting in machine Consequently, minority if on even rule should it differ from the status where availability remedy adopted is now reeving block had left on the machine been by majority, I proposed this would leave by Page? opine very to a involved We application resulting economic dam- by differentiating rights concept economic age part limitation to the failed and not recovery, although faulty part did deny recovery for other done to thing and caused the same dam the same machine, the balance of the as well as other age following installation whoever. property personal inju- external or losses Trucks, Concrete, Fondyce Inc. v. Mack ries, are incurred. (D.Kan.1982); Inc., F.Supp. 118 Largo za, 1164; F.Supp. Hales Green Colo VI. CONCLUSION nial, Inc., (8th Cir.1974); 490 F.2d 1015 Washington It is fair to conclude that Hall, 152 Firestone Tire & Rubber Co. v. (Washing 774 P.2d 1199 Water Power Ga.App. S.E.2d ton), Cloud, (Alaska), 563 P.2d 248 Salt highly unlikely It is that for most inte- Dist., Project Agr. Imp. River and Power machines, grated the manufacturer actual- (Arizona), Dudley 694 P.2d 198 John R. ly composite parts. most of the fabricated Const., Inc., (New York), N.Y.S.2d consequently scope I limit the of a would Fuels, Inc., Capitol 382 S.E.2d 311 single part defect—non-tort —to (West Virginia), as as the well other au originally failed and not what it whatever develop noted reflect not thorities parts the other the machine in did to ing socially case appro direction of law but failing. The courts that have declined this priate engineered philosophy directed to approach espoused rational have the intent product and a safer ward better environ recovery. to limit tort To reach a result pure ment. Neither the East River idiom is, me, unnecessary redefinition subter- nor its half of loaf commercial transac fuge. part If the failed is not unnecessar- offspring minority posture tion as a de ily dangerous in occurrence re- adaptation serve for either consumer or depreciation as flects deterioration and purchasers in jurisdiction.36 commercial bargain, I denied benefit would leave Confining recovery to contractual remedies adjudication parties Today between no reeving makes real sense. block, straight warranty contract or standards no heating tomorrow the unit control or pump. matter how much or how little of the entire fuel vehicle Sometimes for damaged. tuity, personal injury machine other will Otherwise, carefully we fail to: base its decision on articulated argument public policy sup- that the yet Rather than another contribute unex- ports strict does or plained does not extend to and unreasoned decision to the eco- loss. pile, economic nomic loss the court could instead care- Comment, fully problems supra, consider the of definition and 34 S.D.L.Rev. at 136. I would court, hope "something commercial could transactions. The with that author for better." *41 fortuity is but, unfortunately, not result danger faulty and continuity and with injury inevitably be products, there will

ous damage in time.

and other mis-

Finding by this court both error claim and

understanding warn

denial of access

claim, respectfully dissent. I CORPORATION, Jersey a New

EXXON Petitioner,

corporation, BOARD OF

WYOMING STATE Respondent.

EQUALIZATION,

No. 88-132. Wyoming.

Supreme Court of 7, 1989.

Dec. (argued) Holland &

Lawrence J. Wolfe & Hart, Alan Poe of Holland Cheyenne, notes Cases, nomic Loss 29 Mercer L. Rev. Property damage usually readily distin- (1978). guishable example, from economic loss. For operation prop- of a defective radiator causes Comment, defined, Conversely the author in damage erty when it results in a fire which supra, (emphasis Hall L. Rev. at Seton 154-55 destroys plaintiffs store economic and omitted) added and footnote states: when it harm results conditions so uncom- that it Purely may fortable causes the loss of customer economic losses be classified into times, however, patronage. categories: At the distinction two direct basic economic losses may consequential be more difficult to manufac- or draw. If A and indirect economic loss- paste which it tures sells to B who uses it to es. A economic loss direct includes a diminu- C, product cement shoes which he sells failure of of the a tion in the value by as measured properly paste purchase price adhere economic causes the difference between the physically damage product represented loss if does not the shoes or value of the as to the unsaleable; merely purchaser product renders them on the the value of and after hand, paste physi- discovery type other cally damages a defect in the the defect. This direct property bargain. the shoes causes loss. economic is known as a loss loss itself, damage product If the is to the defective A direct loss also economic includes whatever repair may repairing distinctions must When be similar he drawn. costs incurred in "involving any product causes an the defect accident some defective and direct incidental objects,” expenditures may violence or collision with be external incurred in re- resulting placing property product loss is dam- treated as a defective which cannot be hand, hand, damage age. repaired. On the other when the the other On indirect or con- deterioration, product sequential results from inter- economic losses include both loss- causes, breakage, profits op- or other nal non-accidental es of future business and business portunities. commonly it is treated as economic loss. It is also im- Such losses are re- portant distinguish expectation Consequential and between "direct" to as losses. ferred "consequential” economic eco- loss. Direct economic losses also include indirect loss may damage encompass resulting inability loss nomic said to from the consumer’s to se- value; thus, product replacement on based insufficient di- cure an cover or effective for the may pocket”— product. rect economic loss be "out defective eases, it is liability physical understand the structure claim be made for kinds helpful recoverability injury. is found in some cases consider There also damage not fence with a decision product whether the and to be difference only exists. is the This commercial or consumer nature. whether comparing liability justification for strict appar- These economicloss cases negligent liability cases ently product damage direct address independent of the of a those violation loss, long prop- as no indirect economic prod- separately to warn where located inju- erty personal damage results no cases. obligation uct sales per- ries are sustained users or other wrongfully A tort is invades Opinion sons. writers and scholars do not an act negli- happens rights persons make clear what if there is also the of other —either liability. injury damages. gent, or willful indirect That or founded strict engendered by confusion is indecision of In order for actionable results to follow tort, inquiry whether is the existence of an from the occurrence of there theory recovery additionally required proximate of tort or cause and available on, damage compensable damage. limitation recoverable This raises the without case regard availability defective recoverability for the of the from a theory. into put Differentiation between strict lia- which was the stream of bility adds further miscon- commerce whether results to it- Gaebler, self, Neg- struction and confusion. to which balance machine Loss, U.C.C., attached, ligence, person prop- Economic it is to a other erty. “wrongful ac- Ind.L.J. 593 conduct change by does tion” difference significance proper of a use of terms damage. Consequently, proper inquiry theory and determination of quickly can be