Justia Products Liability Opinion Summaries

In 2007, neighbors reported a fire that had erupted at the home of the Terrence and Judith Tincher in Downingtown. The residence was the central unit of a two-story triplex purchased by the Tinchers in 2005. The fire was eventually extinguished and no one was harmed. Investigators concluded that a lightning strike near the home caused a small puncture in the corrugated stainless steel tubing (“CSST”) transporting natural gas to a fireplace located on the first floor of the residence. The CSST installed in the Tinchers’ home was manufactured and sold by Omega Flex as part of a gas transportations system marketed as the TracPipe System. The melting of the CSST caused by the lightning strike ignited the natural gas and fueled the fire estimated to have burned for over an hour. The fire caused significant damage to the Tinchers’ home and belongings. After the fire, the Tinchers reported the incident to their insurer, United Services Automobile Association (“USAA”). USAA compensated the Tinchers for their loss up to the limit of their policy and received an assignment of liability claims. The Tinchers suffered an additional out-of-pocket loss because a portion of their claimed loss exceeded the limits of the USAA policy. In January 2008, the Tinchers filed a complaint against Omega Flex; USAA prosecuted the claims in the name of the Tinchers to obtain reimbursement of the insurance proceeds payout, but the Tinchers retained an interest in the litigation to recover the losses exceeding their insurance coverage. The Tinchers asserted claims premised upon theories of strict liability, negligence, and breach of warranty, alleging that Omega Flex was liable for damages to their home caused by the placement on the market and sale of the TracPipe System. Omega Flex, Inc., appealed the Superior Court's decision to affirm the judgment on the verdict entered in favor of the Tinchers. After review, the Supreme Court reversed in part, and remanded the case with instructions: (1) "Azzarello v. Black Brothers Company," (391 A.2d 1020 (Pa. 1978)) was overruled; (2) a plaintiff pursuing a cause upon a theory of strict liability in tort must prove that the product is in a “defective condition”; (3) whether a product is in a defective condition is a question of fact ordinarily submitted for determination to the finder of fact; (4) to the extent relevant here, the Court declined to adopt the Restatement (Third) of Torts: Products Liability despite acknowledging that "certain principles contained in that Restatement has certainly informed [its] consideration of the proper approach to strict liability in Pennsylvania in the post-Azzarello paradigm." View "Tincher v. Omega Flex, Inc." on Justia Law

Appellee AGCO Corporation (AGCO) manufactured and sold a self-propelled, agricultural spray applicator called the "RoGator." In 2005, AGCO began offering an Extended Protection Plan (EPP) to its RoGator customers. Appellant Lloyd’s Syndicate No. 5820 d/b/a Cassidy Davis provided the master policy of insurance for the EPP program, which covered AGCO for certain liability to customers who purchased the RoGator EPP. Glynn General Corporation administered the plans. Between 2005 and 2008, AGCO enrolled about 2,050 RoGator machines in the EPP program. In 2008, a number of customers presented claims under the EPP based on the failure of wheel motors on the RoGator. After it paid about 25 claims related to this failure, Cassidy Davis invoked the "Epidemic Failure Clause" of the master insurance policy and refused to pay for any more claims. AGCO then sued Cassidy Davis asserting various claims, namely claims for breach of contract and bad faith denial of insurance coverage. The trial court granted partial summary judgment to AGCO and denied partial summary judgment to Cassidy Davis on a breach of contract issue, holding that the EPP covered failures caused by design and engineering defects in the RoGators. The trial court also denied Cassidy Davis’s motion for summary judgment on the bad faith claim, rejecting the insurer’s argument that it was not obligated to indemnify AGCO until a court entered a judgment establishing AGCO’s legal liability to its customers. The Court of Appeals affirmed the trial court on both issues. Cassidy Davis appealed, arguing: (1) that the Court of Appeals erred in its interpretation of the coverage provision of the extended protection plan; and (2) the Court of Appeals erred in its interpretation of the indemnity provision of the master policy of liability insurance. Upon review of the matter, the Supreme Court concluded the Court of Appeals misinterpreted the relevant language of both contracts. Therefore the Court reversed on both issues. View "Lloyd's Syndicate No. 5820 v. AGCO Corporation" on Justia Law

Appellants filed a products liability action against Daimler-Chrysler Corporation after they were involved in a rollover collision while driving their Chrysler PT Cruiser. Appellants later filed a complaint for declaratory relief against Allianz Versicherungs-Aktiengesellschaft (“Allianz”), an international insurance company that provided insurance to Chrysler, alleging that Allianz had a duty to defend Chrysler in the underlying action. The district court granted summary judgment for Allianz and dismissed the complaint. Twenty months later, Appellants filed a complaint to vacate the summary judgment. The district court sustained Allianz’s motion to dismiss the complaint. The Supreme Court affirmed, holding (1) the time for exercise of the district court’s inherent power to vacate its judgment had expired; (2) the district court lacked jurisdiction to vacate its judgment because Appellants did not properly serve Allianz; and (3) the district court did not err in invoking its equity jurisdiction to vacate where Appellants had an adequate remedy at law. View "Carlson v. Allianz Versicherungs-Aktiengesellschaft" on Justia Law

PETCO sought a declaration that ICNA had to defend and indemnify PETCO in an underlying litigation with Medtronic. Medtronic sued PETCO after an aquarium heater it had purchased from PETCO malfunctioned and started a fire at a Medtronic plant. The district court granted ICNA's motion for summary judgment and PETCO appealed. At issue was whether the aquarium heater satisfied a condition precedent to coverage under the policy. The court affirmed the district court's judgment on the ground that PETCO failed to identify any mandatory or voluntary safety standard with which the heater complied.View "PETCO Animal Supplies Stores, et al. v. Ins. Co. of North America" on Justia Law

Tennessee resident Lombard acquired a 1997 Lincoln Town Car in 2004. The car was partially manufactured, and its final assembly completed, in 1996 at Ford’s Wixom, Michigan plant. In March 2007, the Lincoln, which was licensed, registered, and insured in Tennessee, allegedly caught fire in Lombard’s driveway, causing damage to the car, Lombard’s residence, and personal property. Lombard’s insurers reimbursed Lombard for his losses and, as subrogees, sued Ford, asserting products liability, breach of warranty and negligence claims, alleging that the fire was due to a defective cruise control system. The district court dismissed, finding that Tennessee law governed and that Tennessee’s statute of repose for products liability actions bars the claims. The Sixth Circuit affirmed, after examining Michigan choice of law rules. The conclusion that Michigan’s interests do not “mandate” that Michigan law be applied despite Tennessee’s interests was not erroneous.View "Std. Fire Ins. Co. v. Ford Motor Co." on Justia Law

Mead Johnson, purchased a primary Commercial General Liability policy from National Union, with a limit of $2 million for liability for “personal and advertising injury” and an excess liability policy from Lexington, with a limit of $25 million. Mead’s main product, Enfamil infant formula, is sold worldwide. Mead’s competitor, PBM, sued Mead for false advertising and consumer fraud and Mead sued PBM for trade dress infringement. PBM claimed that Mead had falsely asserted that PBM’s generic formula lacked key fats that promote brain and eye development. The suit sought $500 million in damages for product disparagement, a tort that the policies cover as a form of “advertising injury.” Mead did not notify the insurers of the suit until December 2009, after the suit ended in the $13.5 million verdict against Mead. Mead wanted its insurers to pay that judgment, plus a $15 million settlement that it made to resolve the class action suit. The insurers obtained declaratory judgments that they were not required to pay. The Seventh Circuit reversed the summary judgment in favor of the insurers in the suit relating to the PBM litigation, but affirmed the judgment in favor of National Union in the suit arising from the class action against Mead. View "Nat'l Union Fire Ins. Co. v. Mead Johnson & Co., LLC" on Justia Law

John and Judith Valloze and Nationwide Mutual Insurance Company; State Farm Mutual Auto Insurance Company; Freightliner Custom Chassis Corporation; Freightliner, Allison Transmission, Inc. ("Allison Transmission"); and Cummins Atlantic, LLC, separately petitioned the Supreme Court for writs of mandamus to direct the Franklin Circuit Court to dismiss the declaratory-judgment actions filed against them by Tiffin Motor Homes, Inc. Tiffin manufactured and sold custom-made motor homes. In its complaint in the Valloze action, Tiffin alleged that the Vallozes, who reside in Florida, purchased a Tiffin "Allegro Red" motor home that was manufactured by Tiffin in Red Bay, Florida. In 2011, the Vallozes' motor home caught fire somewhere in South Carolina and was declared a total loss. Nationwide insured the motor home, and it paid the Vallozes for their loss. Tiffin subsequently filed a complaint against the Vallozes, Nationwide, Freightliner, Allison Transmission, and Cummins in Alabama, describing Allison Transmission and Cummins as manufacturers of component parts for Tiffin that Tiffin alleged were the source of the fire. The Vallozes, Nationwide, Allison Transmission, Freightliner and Cummins filed motions to dismiss which were ultimately denied. The trial court did not provide reasons for its rulings. All parties appealed. In the Katnich action, Tiffin alleged that Karen Katnich purchased a Tiffin "Phaeton" motor home in Virginia, and somewhere in North Carolina, the motor home caught fire and suffered a total loss. Tiffin sued State Farm, Custom Automated Services, Inc., Waterway, Inc., Maxzone Auto Parts Corporation and Freightliner, alleging each manufactured parts for Tiffin that were the source of the fire. In both cases, Tiffin asserted that a real, present justiciable controversy existed between the parties as to the cause and origins of the motor home fires. Again the trial court denied motions to dismiss, and provided no reasons for its ruling. After its review, the Alabama Supreme Court concluded with the conclusion of the overwhelming majority of other jurisdictions that declaratory-judgment actions were not intended to be a vehicle for potential tort defendants to obtain a declaration of nonliability. Because a bona fide justiciable controversy did not exist either action, the Court concluded that the trial court erred in denying the petitioners' motions to dismiss Tiffin's complaints. View "Tiffin Motor Homes, Inc. v. Valloze " on Justia Law

Tiara Condominium Association (Tiara) retained Marsh & McLennan (Marsh) as its insurance broker. Marsh secured windstorm coverage through Citizens Property Insurance Corporation (Citizens), which issued a policy that contained a loss limit in an amount close to $50 million. Tiara's condominium subsequently sustained damages caused by two hurricanes. After being assured by Marsh that the loss limits coverage was per occurrence, Tiara spent more than $100 million in remediation efforts. However, when Tiara sought payment from Citizens, Citizens claimed that the loss limit was $50 million in the aggregate, not per occurrence. Tiara filed suit against Marsh, alleging, inter alia, breach of contract, breach of fiduciary duty, and negligence. The trial court granted summary judgment for Marsh on all claims. The appeals affirmed with the exception of the negligence and breach of fiduciary claims, as to which it certified a question to the Supreme Court to determine whether the economic loss rule prohibits recovery, or whether an insurance broker falls within the professional services exception that would allow Tiara to proceed with the claims. The Court answered by holding that the application of the economic loss rule is limited to products liability cases.View "Tiara Condo. Ass'n, Inc. v. Marsh & McLennan Cos. " on Justia Law

Plaintiff, Metropolitan Property and Casualty Insurance Company, brought a product liability action against Defendant, Deere and Company, claiming that a lawn tractor manufactured by Defendant contained a manufacturing defect in its electrical system that caused a fire resulting in the destruction of the home of Plaintiff's insureds. Following a jury trial, the trial court rendered judgment in favor of Plaintiff. The Supreme Court reversed, holding (1) a plaintiff may base a product liability action on the "malfunction theory," which allows a jury to rely on circumstantial evidence to infer that a product that malfunctioned was defective at the time it left the manufacturer's or seller's control if the plaintiff establishes certain elements; and (2) the trial court erred in denying Defendant's motion for a directed verdict because Plaintiff's evidence in the present case was insufficient to establish its products liability claim. View "Metro. Prop. & Cas. Ins. Co. v. Deere & Co." on Justia Law

Robinson marketed and sold camouflage products that, according to Robinson, would eliminate human scent so that wild game, with their acute sense of smell, would not be able to detect a hunter's presence. Consumers who had purchased these products brought class action lawsuits against Robinson, claiming that Robinson's products did not actually eliminate human odor (collectively, "the underlying lawsuits"). Robinson sought defense and indemnification from it's insurer, Westfield, but Westfield declined coverage. Instead, Westfield brought this action seeking a declaratory judgment that the policy did not cover the underlying lawsuits. The court affirmed the district court's grant of summary judgment in favor of Westfield where Westfield was under no obligation to defend or indemnify Robinson in the underlying lawsuits and where Robinson waived its argument premised on the reasonable-expectations doctrine. View "Westfield Ins. Co. v. Robinson Outdoors, Inc." on Justia Law