- Ohio Federal Court Grants Summary Judgment to Tractor Manufacturer on Insurer’s Case Alleging Design Defects
- June 13, 2014
- Law Firm: Sutherland Asbill Brennan LLP - Washington Office
Following a fire that entirely destroyed a commercial farming tractor, an insurer paid the tractor’s owner a significant sum under a casualty/property policy, and then brought suit against the tractor manufacturer and the manufacturer of the tractor’s turbocharger alleging defective design claims. One day before the incident, however, a worker for the insured noticed steam and water coming from the engine from what appeared to be a break in a radiator hose, and the worker cut off a ten-foot section of the hose, rerouted it through the engine compartment, and reattached it. The U.S. District Court for the Northern District of Ohio granted the manufacturers’ motions for summary judgment this week.
The court found that the insurer’s experts had not produced sufficient evidence showing that the tractor was defective and that such a defect was a proximate cause of the fire. The insurer relied on circumstantial evidence alone for the proposition that the tractor was the proximate cause of the fire, alleging that it was nearly new when it caught fire and that defect-free products do not usually catch fire. Here, the insurer could not produce even circumstantial evidence as to any specific defect and the court ruled that absent expert testimony or other evidence demonstrating how the tractor was defective, summary judgment for the manufacturers on the insurer’s product liability claims was appropriate where the insurer could not establish that the defendants’ conduct proximately caused the losses associated with the fire. The court commented that based on the insurer’s experts’ conclusions, the proximate cause was just as reasonably attributable to other causes as it was to a design or manufacturing defect.
The court also granted summary judgment to the manufacturers on the insurer’s negligence claims under the economic loss rule because the insured was a commercial buyer and the insurer was seeking to recover only the amount it paid on the insurance claim for the tractor’s damage. The insurer argued that it still could recover in tort under Ohio law because the economic loss doctrine did not preclude tort recovery for personal injury or physical damage to “other property,” which the insurer contended would include an in-cab GPS guidance system and an in-cab applicator system given they were separately purchased and installed in the tractor. The court rejected the insurer’s argument and found that the additional components became part of the “integrated product as a whole” that was the tractor. The court explained, “if a component attached to property was not considered a part of the integrated product as a whole, purchasers who attach additional components to their property after purchase could overcome the economic loss doctrine in almost every case.”
The court also granted summary judgment on the insurer’s breach of express warranty claim on the grounds that by attempting to repair the tractor’s heater hose without first consulting the manufacturer, the insured performed an “unauthorized modification or field fix” that rendered the express warranty inapplicable based on the clear and unambiguous terms of the warranty.