Case Title: Stephen L. and Melinda Vaughn v. Daniels Co. (West Virginia), Inc. and Solar Sources, Inc.

Citation: 

Docket Number: 14S01-0602-CV-37

State: indiana

Court: Indiana Supreme Court

Date: 2006-02-07T00:00:00Z

Document:
ATTORNEYS FOR APPELLANTS 
 
 
 
ATTORNEYS FOR APPELLEE, DANIELS COMPANY, INC 
J. Kevin King 
 
 
 
 
 
Jeffrey W. Ahlers 
Peter Campbell King 
 
 
 
 
Todd C. Barsumian 
Columbus, Indiana 
 
 
 
 
Evansville, Indiana 
 
 
 
 
 
 
 
 
ATTORNEY FOR APPELLEE, SOLAR SOURCES, INC. 
 
 
 
 
 
 
 
R. Steven Johnson 
 
 
 
 
 
 
 
Terre Haute, Indiana 
 
 
 
 
 
 
 
 
ATTORNEYS FOR AMICUS CURIAE, DEFENSE 
 
 
 
 
 
 
 
TRIAL COUNSEL OF INDIANA 
 
 
 
 
 
 
 
Knight S. Anderson 
 
 
 
 
 
 
 
Indianapolis, Indiana 
 
 
 
 
 
 
 
 
James D. Johnson 
 
 
 
 
 
 
 
Evansville, Indiana 
______________________________________________________________________________ 
 
In the 
Indiana Supreme Court  
_________________________________ 
 
No. 14S01-0602-CV-37 
 
STEPHEN L. VAUGHN AND 
MELINDA VAUGHN,  
 
 
 
 
 
 
 
 
Appellants (Plaintiffs below), 
 
v. 
 
DANIELS COMPANY (WEST VIRGINIA), 
INC. AND SOLAR SOURCES, INC., 
 
 
 
 
 
 
 
 
Appellees (Defendants below). 
_________________________________ 
 
Appeal from the Daviess Circuit Court, No. 14C01-9712-CT-404  
The Honorable Robert L. Arthur, Judge 
_________________________________ 
 
On Petition To Transfer from the Indiana Court of Appeals, No. 14A01-0111-CV-408 
_________________________________ 
 
February 7, 2006 
 
 
 
Boehm, Justice. 
 
We hold that “use” of a product under the Indiana Products Liability Act does not include 
assembly and installation where the seller retains an obligation or arrangement with the pur-
chaser to deliver a fully assembled and installed product.  Because the plaintiff was injured in the 
process of installing the product on behalf of its supplier, he is not a consumer or user of the 
product that had not yet been assembled as required by the purchaser and has no claim under the 
PLA.  For this reason, his negligence claim is not governed by the PLA.   
Factual and Procedural History 
 
At some time before December 1995, Daniels Company, Inc. contracted with Solar 
Sources, Inc. to design and build a coal preparation plant on Solar’s premises in Cannelburg, 
Indiana.  As part of its contract with Solar, Daniels was to design and install a heavy media coal 
sump.  Based on Daniels’s design, the West Virginia Steel Corporation manufactured the unas-
sembled coal sump and shipped it to Solar’s Cannelburg site.  Daniels subcontracted with Trim-
ble Engineers and Constructors, Inc. to construct the coal plant, including assembly and installa-
tion of the sump.     
On December 12, 1995, plaintiff Stephen Vaughn, an employee of Trimble, was injured 
when he fell approximately fifteen feet from the top of the sump in the process of assembling it.  
He had been standing on a metal grating approximately two feet below the upper rim of the 
sump, attempting to assist others in affixing a large pipe at the top of the sump.  When the pipe 
was placed by a forklift, other Trimble employees attached a chain to it, and the forklift moved 
away.  As the forklift withdrew, the pipe fell off the sump, pulling Vaughn with it.  Although he 
was aware of the danger, Vaughn was not wearing a safety belt.  He suffered multiple injuries in 
the fall.1   
Vaughn sued both Daniels and Solar, alleging negligent design, manufacturing, and 
maintenance of the sump and the processing plant.  He also asserted a strict liability claim 
                                                 
1 Vaughn’s injuries included a fractured tibia and fibula, a facture of the radius and ulnar bones in his 
wrists, fractures of bones in his hand and foot, and two broken ribs.   
 
2
against Daniels under the Indiana Products Liability Act (“PLA”).  Vaughn’s wife Melinda 
claimed loss of consortium.   
Both Daniels and Solar moved for summary judgment.  The trial court granted both mo-
tions for summary judgment, concluding that neither Daniels nor Solar owed Vaughn a duty of 
care, and that Vaughn was not a “user” or “consumer” of the coal sump within the meaning of 
the PLA. 
The Vaughns appealed, claiming that the trial court erred in determining that Vaughn was 
not a “user” or “consumer” under the PLA and in finding no negligence in the design of the facil-
ity.  They also contended that the trial court erred in striking a portion of an affidavit that the 
Vaughns had designated in opposition to the motions for summary judgment.  The Court of Ap-
peals affirmed summary judgment for both Solar and Daniels on the Vaughns’ negligence claims 
and reversed the summary judgment for Daniels on Stephen Vaughn’s product liability claim.  
Vaughn v. Daniels Co., Inc., 777 N.E.2d 1110, 1139 (Ind. Ct. App. 2002).   
I.  Solar’s Motion to Strike Expert’s Affidavit 
 
At the outset we deal with Solar and Daniel’s motions to strike portions of the affidavit of 
David MacCollum which the Vaughns designated in response to the defendants’ motions for 
summary judgment.  The trial court admitted all of the designated evidence except paragraph 17 
of MacCollum’s affidavit.   
Daniels and Solar assert that MacCollum’s affidavit relied on two documents that consti-
tute hearsay and are not self-authenticating.  MacCollum states that he reviewed the documents 
entitled “Design, Procurement, and Construction of the Cannelburg Preparation Plant for Solar 
Sources, Inc.”2 and “Defendant Daniels Health and Safety Policy” and that these documents are 
“the type of information normally relied upon by me in the field of my experience in providing 
opinions.”  Indiana Trial Rule 56(E) provides: 
Supporting and opposing affidavits shall be made on personal knowledge, shall 
set forth such facts as would be admissible in evidence, and shall show affirma-
                                                 
2 No formal contract was ever executed between Daniels and Solar.  The arrangement was documented in 
this proposal by Daniels. 
 
3
tively that the affiant is competent to testify to the matters stated therein.  Sworn 
or certified copies not previously self-authenticated of all papers or parts thereof 
referred to in an affidavit shall be attached thereto or served therewith. 
Indiana Evidence Rule 703 provides that: “Experts may testify to opinions based on inadmissible 
evidence, provided that it is of the type reasonably relied upon by experts in the field.”  The de-
fendants do not challenge MacCollum’s professional credentials and do not claim that these 
documents are not of the type reasonably relied upon by experts in the field.  Accordingly, under 
Rule 703, the contested documents may be used by MacCollum in forming his opinions whether 
or not the documents are themselves admissible evidence.   
 
Solar and Daniels also challenge MacCollum’s affidavit on the ground that it contains 
inadmissible legal conclusions.  Indiana Evidence Rule 704 permits opinions to embrace ultimate 
issues to be decided by the trier of fact, but prohibits opinions as to legal conclusions.  Mac-
Collum’s opinions concerning engineering standards, procedures, and the design of the coal 
sump and facility are based on his expertise and are permitted by Evidence Rule 704.  His opin-
ions concerning reasonable care or proximate cause in paragraph 17 embrace ultimate issues to 
be decided by the trier of fact and therefore are admissible.3  See Rhodes v. Wright, 805 N.E.2d 
382, 388 (Ind. 2004) (the issue of proximate cause “is one usually left to the jury”); Stephenson 
v. Ledbetter, 596 N.E.2d 1369, 1372 (Ind. 1992) (“Whether a particular act or omission is a 
breach of a duty is generally a question of fact.”).  
Solar and Daniels also contend that the opinions expressed by MacCollum lack founda-
tion because he did not view the plant and reviewed only the documents setting forth Daniels’s 
proposal.  Hands-on experience, formal education, specialized training, study of textbooks, per-
forming experiments and observation can provide the foundation for an expert’s opinion.  See 
Summit Bank v. Panos, 570 N.E.2d 960, 965 (Ind. Ct. App. 1991), trans. denied (citing 13 W. 
Miller, Indiana Practice § 702.103, at 35-37 (1984)).  Moreover, although Trial Rule 56(E) man-
                                                 
3 Paragraph 17 provides: 
17.  Based upon my engineering and construction management expertise and review of 
the documents listed above, it is my opinion Defendant Solar as owner of the property in 
question failed to use reasonable care by not requiring and/or participating in a construc-
tion management plan and/or a process of plant assembly plan for the design of the Can-
nelburg Project.  Failure to use such reasonable care proximately resulted in injury to Mr. 
Vaughn. 
 
4
dates that affidavits be made on personal knowledge, this does not mean that an expert must ob-
tain his knowledge based solely on first-hand experience.  See Bunch v. Tiwari, 711 N.E.2d 844, 
849 (Ind. Ct. App. 1999).  MacCollum stated that his opinions were based on his engineering and 
construction management expertise and review of the documents setting forth Daniels’s pro-
posal.  We conclude that MacCollum’s prior experience and review of these documents provided 
a sufficient foundation and that it was not necessary for MacCollum to have seen the sump in 
person for him to render an expert opinion.  We therefore conclude that the trial court erred in 
striking paragraph 17 of MacCollum’s affidavit but correctly admitted the remaining portions of 
it. 
II.  Standard of Review 
 
Summary judgment is appropriate when the designated evidence shows that there is no 
genuine issue of material fact and that the moving party is entitled to judgment as a matter of 
law.  Ind. Trial Rule 56(C); see also Meridian Mut. Ins. Co. v. Auto-Owners Ins. Co., 698 N.E.2d 
770, 773 (Ind. 1998).  Although the Vaughns have the burden of persuading us that the grant of 
summary judgment was erroneous, we carefully assess the trial court’s decision to ensure that the 
Vaughns were not improperly denied their day in court.  Erie Ins. Co. v. George, 681 N.E.2d 
183, 186 (Ind. 1997).  All facts and reasonable inferences drawn from those facts are construed 
in favor of the Vaughns.  Foster v. Auto-Owners Ins. Co., 703 N.E.2d 657, 659 (Ind. 1998); 
Wright v. Carter, 622 N.E.2d 170, 171 (Ind. 1993). 
III.  The Strict Liability Claim 
The complaint asserts a strict liability claim against Daniels under the Indiana Products 
Liability Act, Indiana Code sections 34-20-1-1 through 34-20-9-1.  The trial court determined 
that Vaughn was neither a “user” nor a “consumer” as those terms are defined in the Act, and 
therefore had no claim under the PLA.  We agree.  Section 34-20-1-14 provides: 
This article governs all actions that are: 
(1) brought by a user or consumer; 
                                                 
4 At the time this cause of action arose, the relevant provisions of the PLA were codified at Indiana Code 
sections 33-1-1.5-1 to 33-1-1.5-10.  In 1998 the PLA was recodified at Indiana Code sections 34-20-1-1 
to 9-1.  See Pub. L. No. 1-1998, § 15, 1998 Ind. ALS 1, *15. 
 
5
(2) against a manufacturer or seller; and 
(3) for physical harm caused by a product; 
regardless of the substantive legal theory or theories upon which the action is 
brought.  
Indiana Code section 34-20-2-1 sets forth the requirements of a strict liability claim governed by 
the PLA.  It provides: 
[A] person who sells, leases, or otherwise puts into the stream of commerce any 
product in a defective condition unreasonably dangerous to any user or consumer 
or to the user’s or consumer’s property is subject to liability for physical harm 
caused by that product to the user or consumer or to the user’s or consumer’s 
property if: 
(1) 
that user or consumer is in the class of persons that the seller should 
reasonably foresee as being subject to the harm caused by the defec-
tive condition; 
(2) 
the seller is engaged in the business of selling the product; and 
(3) 
the product is expected to and does reach the user or consumer with-
out substantial alteration in the condition in which the product is sold 
by the person sought to be held liable under this article.   
I.C. § 34-20-2-1.  The Act defines a “consumer” as: 
(1) a purchaser; 
(2) any individual who uses or consumes the product; 
(3) any other person who, while acting for or on behalf of the injured party, was 
in possession and control of the product in question; or 
(4) any bystander injured by the product who would reasonably be expected to be 
in the vicinity of the product during its reasonably expected use. 
I.C. § 34-6-2-29.  Indiana Code section 34-6-2-147 provides that “user” has the same meaning as 
“consumer” for purposes of the PLA.  Vaughn was plainly not the “purchaser” of the coal sump 
and he was the injured party, not someone “acting for or on behalf of the injured party.”  Thus, 
Vaughn must be either an “individual who uses or consumes the product” under subsection (2) or 
a bystander reasonably “expected to be in the vicinity of the product during its reasonably ex-
pected use” under subsection (4).  
Daniels argues that Vaughn cannot be considered a “user” of the coal sump because 
Daniels had a contractual obligation to assemble and install the sump before delivery to Solar.  
Accordingly, Daniels argues that at the time of Vaughn’s injury, the pump could not and did not  
 
6
“reach the user or consumer [Solar] without substantial alteration in the condition in which the 
product is sold by the person sought to be held liable.”  See I.C. § 34-20-2-1(3).  Daniels argues 
that Solar is the statutory “purchaser,” and can become a “user” of the sump only when assembly 
and installation was complete.  We agree that the critical fact here is that Solar had ordered an 
assembled and constructed plant, and had expressly contracted to have Daniels perform the tasks 
necessary to provide the assembled and installed product.   
Vaughn contends that “use” of a product can encompass installation or assembly.  We 
agree that this is true of a product that is to be delivered to the ultimate purchaser in an unassem-
bled state.  But here the arrangement called for the manufacturer (Daniels) to install and assem-
ble the product on the purchaser’s (Solar’s) premises.  Trimble, as the entity employed by 
Daniels to accomplish that, and Vaughn, as Trimble’s employee, were not yet dealing with the 
product that Solar had agreed to purchase.  For that reason, neither Vaughn nor anyone else was 
a user of the product at the time it was still in the process of assembly and installation.  As ex-
plained below, we think this conclusion is consistent with case law in this and other jurisdictions 
and with the structure of the PLA. 
We do not agree with Daniels that assembly and installation can never constitute use.  
Daniels cites Wingett v. Teledyne Indus., Inc., 479 N.E.2d 51 (Ind. 1985), to support the proposi-
tion that assembly and installation are  not “use” of a product.  In Wingett the owner of a foundry 
hired an independent contractor to remove the foundry’s existing ductwork.  Id. at 53.  An em-
ployee of the independent contractor, who was injured in the course of the removal effort, 
brought a products liability action against the manufacturer and installer of the ductwork.  Id. at 
54.  This Court affirmed the trial court’s grant of summary judgment to the installer and manu-
facturer on the ground that a person who dismantles or demolishes a product is not a “user” or 
“consumer” under the PLA.  Id. at 55-56.  Since Wingett was decided, however, we have held 
that the intended use of a product includes foreseeable maintenance and clean-up activities.  But-
ler v. City of Peru, 733 N.E.2d 912 (Ind. 2000) addressed a claim by a school maintenance 
worker electrocuted while attempting to fix the school’s electrical transmission system.  We held 
that the maintenance worker, as an employee of the final purchaser of the transmission system 
was a “user” or “consumer.”  Id. at 919.  We recently made explicit that “the assumption that 
 
7
maintenance may be a part of a product’s reasonably expected use” was “implicit” in the Butler 
holding.  Stegemoller v. ACandS, Inc., 767 N.E.2d 974, 976 (Ind. 2002).  
We believe that assembly or installation, like maintenance, can also constitute “use” for 
these purposes.  The Restatement (Second) of Torts first adopted strict liability in tort for defec-
tive products in section 402A in 1965.5  In the twenty years following the publishing of the Re-
statement, a majority of jurisdictions, including Indiana, adopted section 402A, as a common law 
rule.  When the Indiana legislature first addressed the issue in legislation in 1978, the Strict 
Products Liability Act, Indiana Code sections 33-1-1.5-1 through 33-1-1.5-8, incorporated sec-
tion 402A of the Restatement Second nearly verbatim.6  Comment l to section 402A states that 
“users” of products include “those who are passively enjoying the benefit of the product, as in 
the case of passengers in automobiles or airplanes, as well as those who are utilizing it for the 
purpose of doing work upon it, as in the case of an employee of the ultimate buyer who is mak-
ing repairs upon the automobile which he has purchased.”  Comment l also states that “consum-
ers” include “not only those who in fact consume the product, but also those who prepare it for 
consumption” and that “consumption includes all ultimate uses for which the product is in-
tended.”  Comment d is consistent with this view, stating that the rule of strict liability in section 
                                                 
5 Section 402A provides as follows: 
 
Special Liability of Seller of Product for Physical Harm to User or Consumer 
(1) One who sells any product in defective condition unreasonably dangerous to the 
user or consumer or to his property is subject to liability for physical harm thereby 
caused to the ultimate user or consumer, or to his property, if 
(a) the seller is engaged in the business of selling such a product, and 
(b) it is expected to and does reach the user or consumer without substantial 
change in the condition in which it is sold. 
(2) The rule stated in Subsection (1) applies although 
(a) the seller has exercised all possible care in the preparation and sale of his 
product, and 
(b) the user or consumer has not bought the product from or entered into any 
contractual relation with the seller. 
Restatement (Second) of Torts § 402A (1965). 
6 In 1998 the ALI published the Restatement (Third) of Torts with new provisions governing products 
liability.  The Restatement Third does away with the “user” and “consumer” language and would allow 
any “person” harmed by a defective product to be a proper plaintiff.  It provides: 
 
Liability of Commercial Seller or Distributor for Harm Caused by Defective Products 
One engaged in the business of selling or otherwise distributing products who sells or dis-
tributes a defective product is subject to liability for harm to persons or property caused 
by the defect. 
Restatement (Third) of Torts:  Products Liability § 1 (1998).  Indiana has not adopted this provision of the 
Restatement Third. 
 
8
402A “extends to any product sold in the condition, or substantially the same condition, in which 
it is expected to reach the ultimate user or consumer.”  As these comments show, the Restate-
ment Second was understood to include ordinary maintenance and repair as “use” of a product,7 
and also supported the conclusion that the intended use of a product includes installation and as-
sembly where a manufacturer expects a product to reach the ultimate user or consumer in an un-
assembled or uninstalled form.     
We therefore agree with Vaughn that use and consumption may include assembly and in-
stallation of a product, but only if the product is “expected to reach the ultimate user or con-
sumer” in an unassembled or uninstalled form.8  The product in this case was not to be delivered 
uninstalled or unassembled.  Rather, Daniels contracted to provide the plant, including the sump, 
in completed status.  Vaughn was injured in the course of preparing the product for transfer to 
                                                 
7 Jurisdictions that have adopted the Restatement Second approach have also concluded that “use” in-
cludes repair and maintenance.  See, e.g., Skarski v. Ace-Chicago Great Dane Corp., 485 N.E.2d 1312, 
1317 (Ill. App. Ct. 1985) (A dealer and distributor of trailers bought a trailer equipped with a refrigeration 
unit for the purpose of resale.  The plaintiff, a repairman employed by the retailer who sold the refrigera-
tion unit contained in the trailer, was injured while repairing the refrigeration unit which was under a 
manufacturer’s warranty.  The plaintiff sued the trailer dealer and the court rejected the trailer dealer’s 
argument that a repairman was categorically not a user of the trailer.); Curcio v. Caterpillar Inc., 543 
S.E.2d 264, 267 n.5 (S.C. Ct. App. 2001), rev’d on other grounds, 585 S.E.2d 272 (S.C. 2003) (Repair-
man killed while repairing heavy machinery for the purchaser sued the manufacturer under a theory of 
strict liability in tort.  The court held the repairman was a “user” of the machinery “in the sense that he 
was ‘utilizing it for the purpose of doing work upon it’” (quoting Restatement (Second) of Torts § 402A 
cmt. l)); Hamilton v. Motor Coach Indus., Inc., 569 S.W.2d 575, 576 (Tex. App. 1978) (The plaintiff, a 
mechanic who was injured while repairing an air cylinder on behalf of the air cylinder purchaser, brought 
a products liability action against the manufacturer-seller of the cylinder.  The court found that the manu-
facturer “expected the air cylinder to undergo change from its use; that the cylinder would need servicing 
. . . and that it could be expected that the cylinder might be serviced by untrained or uninformed work-
men.”  Accordingly, the court concluded that a “user” of the air cylinder, under the definition set forth in 
section 402A comment l, included a mechanic utilizing the cylinder for the purpose of doing work upon it 
for the ultimate buyer.). 
8 Accord Kaneko v. Hilo Coast Processing, 654 P.2d 343, 350 (Haw. 1982) (Purchaser seeking to erect 
new buildings at its mill site hired an architectural firm to design the buildings.  After the designs were 
drafted, a welding company manufactured the mill building.  The plaintiff’s employer was hired to as-
semble the prefabricated building.  The plaintiff, an ironworker, was injured in the course of assembling 
the prefabricated building and sued the manufacturer.  The manufacturer argued that a prefabricated 
building is not a “product.”  The court held that “a prefabricated building that must be assembled is a 
product where the seller-manufacturer may be found strictly liable for injuries caused by a defective com-
ponent part.”); Anunziato v. Kar Grabber Mfg. Co., Inc., 748 N.Y.S.2d 404, 405 (N.Y. App. Div. 2002) 
(A plaintiff injured when an automobile straightening machine fell and struck his foot while it was being 
installed in the plaintiff’s auto body shop sued the machine’s manufacturer for strict liability in tort.  The 
court stated that the manufacturer’s contention that the claim does not lie as a matter of law “because the 
alleged injuries occurred during the installation process is without merit.”). 
 
9
Solar.  He was an employee of an entity to whom Daniels had delegated the task of assembling 
the product.  As such, he is in the same position as an employee of Daniels itself, and has no 
PLA claim as the user or consumer of a product not yet in the hands of its buyer.   
We base our conclusion largely on the statutory framework of Indiana’s PLA and the leg-
islative and judicial history explained above.  We note, however, that a majority of other courts, 
including the Seventh Circuit applying Indiana law, have concluded that a products liability 
claim does not lie where the manufacturer has not completed its obligation to install or assemble 
the product9 but is available where the purchaser is required to install or assemble it.10  Our con-
clusion is also consistent with the Court of Appeals’s view of the requirement that the product 
must have been “sold” to “a first consuming entity” at the time of the plaintiff’s injury.  See 
Thiele v. Faygo Beverage, Inc., 489 N.E.2d 562, 588 (Ind. Ct. App. 1986), trans. denied.  Thiele 
held that “users” or “consumers” under the PLA are limited to those “who might forseeably be 
harmed by a product at or after the point of its retail sale or equivalent transaction” to “a member 
of the consuming public.”  Id. at 586.  (emphasis in original).  Under this analysis, the contract 
between Daniels and Solar for Daniels to design, install and construct a coal preparation plant, 
including a heavy media coal sump, was a transaction “equivalent” to a “retail sale” because it 
                                                 
9 In Ettinger v. Triangle-Pac. Corp., 799 A.2d 95, 98-100 (Pa. Super. Ct. 2000), a kitchen cabinet manu-
facturer contracted for the purchase of a furniture finishing system to be assembled on the purchaser’s site 
by the seller’s subcontractor.  The court granted summary judgment for the seller against an employee of 
the subcontractor who was injured in the installation process on the ground that the oven had not left the 
seller’s control: “Although the component parts of the oven had left [the seller’s] manufacturing plant and 
were being assembled on [the purchaser’s] property, they had not left the seller’s possession, as [the 
seller] indisputably retained the obligation to assemble the component parts and deliver a fully-assembled 
oven.”  Id. at 104-05. 
10 In Lantis v. Astec Indus., Inc., 648 F.2d 1118, 1121-22 (7th Cir. 1981), the Seventh Circuit concluded 
that an employee of the purchaser injured during the course of assembly of an unassembled product had 
stated a claim under Indiana law where the manufacturer supplied an unassembled product for assembly 
by the purchaser.  See also Kaneko, 654 P.2d at 350 (holding that “a prefabricated building that must be 
assembled is a product where the seller-manufacturer may be found strictly liable for injuries caused by a 
defective component part.”); but see Hergeth, Inc. v. Green, 733 S.W.2d 409, 412 (Ark. 1987) (Manufac-
turer of flock feeder machine contracted to sell a flock feeder to a final purchaser.  As a condition of the 
purchase contract, the manufacturer was to supply the manufacturer’s employees to oversee installation 
and start-up of the feeder.  The plaintiff was employed by the manufacturer and was injured during the 
course of installation.  The plaintiff sued the manufacturer under Arkansas’ Products Liability Act.  The 
court held that the plaintiff had stated a cognizable claim, holding that Arkansas’ “products liability stat-
ute clearly contemplates that a manufacturer may be responsible for injuries resulting from defective 
manufacture as well as injuries arising out of the erection and assembly of the product.”). 
 
10
lodged the product with the buyer.  A PLA claim thus requires that the product be in the final 
state called for by the arrangement between the buyer and the seller.     
In sum, at the time of Vaughn’s injury, Daniels remained obligated to assemble and in-
stall the sump.  Daniels engaged Trimble to install and assemble the product, and therefore 
Vaughn was acting on Daniel’s behalf rather than on behalf of Solar at the time of the injury.  As 
a result, Vaughn could not be a “user” or a “consumer” of the yet undelivered product.  More-
over, Vaughn was also not a “bystander,” because a bystander is one who is injured “in the vicin-
ity of the product during its reasonably expected use.”  We think “use” of the product occurs 
only after it is delivered in the state contemplated by the arrangement between the seller and 
buyer.  We thus affirm the trial court’s finding that Vaughn was not a “user” or “consumer” un-
der Indiana Code section 34-6-2-29.  
IV.  The Vaughns’ Negligence Claims 
 
In order to recover on a common law negligence claim, the plaintiff must establish a 
duty on the part of the defendant to conform his conduct to a standard of care arising out of his 
relationship with the plaintiff, a failure on the part of the defendant to conform his conduct to the 
requisite standard of care, and an injury to the plaintiff that is proximately caused by the breach.  
See Franklin v. Benock, 722 N.E.2d 874, 878 (Ind. Ct. App. 2000), trans. denied.  Absent a duty, 
there can be no breach, and therefore, no recovery for the plaintiff in negligence.  Hopper v. Co-
lonial Motel Prop., Inc., 762 N.E.2d 181, 188 (Ind. Ct. App. 2002), trans. denied.  The issue is 
whether either Daniels or Solar owed a duty to Vaughn, and if so, what that duty entailed.   
 
A.  Negligence Claim Against Solar  
Solar was the purchaser of the facility to be designed and furnished by Daniels and in-
stalled by Trimble.  It is undisputed that Solar contracted with Daniels for the design and con-
struction of the coal plant and Solar’s only obligation was to fund the project.11  The acts of neg-
ligence alleged are in the design and manufacture by Daniels, which was admittedly an inde-
pendent contractor of Solar.  The Vaughns assert that Solar is liable for Daniels’s negligence un-
                                                 
11 The Vaughns assert that Solar had contractual duties to oversee safety operations at the worksite.  The 
designated evidence does not support this assertion. 
 
11
der an exception to the general rule that a principal is not liable for the negligence of an inde-
pendent contractor.  We have previously held that:  
[T]he long-standing general rule has been that a principal is not liable for the neg-
ligence of an independent contractor.  However, five exceptions have been recog-
nized for more than half a century.  The exceptions are:  (1) where the contract 
requires the performance of intrinsically dangerous work; (2) where the principal 
is by law or contract charged with performing the specific duty; (3) where the act 
will create a nuisance; (4) where the act to be performed will probably cause in-
jury to others unless due precaution is taken; and (5) where the act to be per-
formed is illegal.  
Bagley v. Insight Commc’ns, Co., 658 N.E.2d 584, 586 (Ind. 1995) (internal citations omitted); 
see also PSI Energy, Inc. v. Roberts, 829 N.E.2d 943, 950 (Ind. 2005).  The Vaughns cite the 
second exception, contending that specific duties are imposed by law under the Federal Mine 
Safety and Health Act of 1977 (“FMSHA”), 30 U.S.C. §§ 801 et seq. (2002).  Specifically, the 
Vaughns maintain that under FMSHA regulations Solar and Daniels owed a duty to provide a 
railing around the coal sump.12
 
The Vaughns are correct that Solar as owner and Daniels as contractor are both subject to 
FMSHA regulations.  Bituminous Coal Operators’ Ass’n v. Sec’y of Interior, 547 F.2d 240, 246-
47 (4th Cir. 1977).  The FMSHA authorizes the Secretary of Labor to inspect mining operations 
and impose civil penalties for FMSHA violations.  30 U.S.C. §§ 802, 813-14, 819-20.  Bitumi-
nous expressly left open the question of allocation of liability for fines as between the owner and 
an independent contractor, but that case did not address civil tort liability.  It does not support the 
Vaughns’ contention that a FMSHA regulation imposes a state law duty for purposes of tort li-
ability of the owner for negligence of an independent contractor.  For these purposes, FMSHA 
regulations are analogous to OSHA regulations applicable to many workplaces.  An OSHA vio-
lation does not in itself render a workplace owner liable in tort for the negligence of an inde-
pendent contractor.  See Ellis v. Chase Commc’ns, Inc., 63 F.3d 473, 478 (6th Cir. 1995) (hold-
ing in a suit against the owner of premises where employee of independent contractor was killed 
                                                 
12 In support of this argument, the Vaughns cite a mandatory safety standard which requires “Openings . . 
. through which men or material may fall shall be protected by railings, barriers, covers or other protective 
devices.”  30 C.F.R. § 77.204 (2005).  In view of our conclusion that FMSHA regulations do not impose a 
state law duty, we need not resolve whether the regulation requiring protective devices around “openings” 
applies to a fall over the side of the sump. 
 
12
that even had there been a violation of OSHA safety regulations, the owner must owe a duty in-
dependent of OSHA in order to create liability).  None of the remaining exceptions to the rule 
that a principal is not liable for an independent contractor’s negligence are applicable.  Accord-
ingly, the trial court properly granted summary judgment in favor of Solar on the negligence 
claim. 
 
B.  Negligence Claims Against Daniels 
The Vaughns’ remaining negligence claims are against Daniels, the designer of the coal 
sump and coal preparation plant.  Specifically, the Vaughns allege:  (1) Daniels negligently de-
signed and manufactured the Cannelburg plant rendering the installation of the coal sump inher-
ently dangerous, (2) Daniels designed and manufactured a defective coal sump constituting a la-
tent danger in the use of the product, and (3) Daniels maintained the property in an unreasonably 
safe condition.  Until 1995, the Products Liability Act did not generally displace products liabil-
ity law except for strict liability claims.  See former I.C. § 33-1-1.5-1 (the PLA “governs all ac-
tions in which the theory of liability is strict liability in tort.”).  In 1995 that section of the PLA 
was amended to provide that it applied to all claims of defective products against a “manufac-
turer” by a “user or consumer” regardless of the theory of liability.  I.C. § 34-20-1-1.  As a result, 
the PLA now applies to all negligence claims brought against a “manufacturer” of a defective 
product by a “user” or “consumer.”  The PLA is explicit that it does not govern other claims:  
“This article shall not be construed to limit any other action from being brought against a seller 
of a product.”  I.C. § 34-20-1-2.  For the reasons given in Part III, Vaughn is not a “user” or 
“consumer” and therefore the Vaughns’ negligence claims are  governed by conventional com-
mon law negligence doctrines, not by the PLA.     
The Vaughns first argue that Daniels assumed a duty for the design safety of the con-
struction site.  Whether a party has assumed a duty and the extent of that duty, if any, are ques-
tions for the trier of fact.  Perry v. N. Ind. Pub. Serv. Co., 433 N.E.2d 44, 50 (Ind. Ct. App. 
1982), trans. denied.  The Vaughns argue that Daniels’s “Health and Safety Policy” establishes 
an issue of material fact relevant to assumption of duty because it states “Handrail, mid-rail, and 
toe boards must be used” on any scaffolding and it requires Daniels’s employees to conduct 
daily, weekly, and periodic inspections.  The Vaughns do not designate any evidence establish-
 
13
ing that the Safety Policy applied to this project or that Daniels was operating under it in the con-
struction of this plant.13  The Vaughns also designated a number of daily field reports completed 
by Daniels’s supervisors.  These reports reference weather conditions, the number of employees, 
and issues pertaining to materials and progress on construction.  There is no indication that 
Daniels’s employees conducted safety inspections prior to completing the forms, and there are no 
notations relating to safety concerns.  Daniels points to its contract with Trimble that explicitly 
imposes these duties on Trimble.  In sum, the designated evidence failed to demonstrate that 
Daniels assumed a duty to supervise safety at the job site. 
The Vaughns next argue that Daniels owed a contractual duty to Vaughn.  The parties 
agree that there was no written contract between Solar and Daniels apart from the “Design, Pro-
curement, and Construction Specification,” which sets forth Daniels’s proposal for the Cannel-
burg project.  The Vaughns cite this document and MacCollum’s opinion that Daniels failed to 
use reasonable care by failing to provide a construction management plant and/or process of 
plant assembly plan.  The Vaughns argue that the terms and conditions of the arrangement be-
tween Solar and Daniels as they relate to the construction site and to Daniels’s responsibilities 
are questions of fact for the jury to decide.  We disagree.  Any duties that Daniels had relating to 
safety arising from its implied contract with Solar were effectively transferred to Trimble in the 
written contract between Daniels and Trimble which provided that Trimble would comply with 
Daniels’s safety policies and conduct weekly safety meetings, would follow all applicable public 
safety laws and would indemnify Solar and Daniels for losses arising from a failure to follow 
public safety laws.  The Vaughns have designated nothing to raise an issue of fact to establish a 
contractual duty on the part of Daniels. 
The Vaughns also bring a negligent design claim against Daniels.  Whether the law rec-
ognizes any obligation on the part of Daniels to conform its conduct to a certain standard for the 
benefit of Vaughn is a question of law.  Webb v. Jarvis, 575 N.E.2d 992, 995 (Ind. 1991).  The 
relationship between Daniels and Vaughn was that of designer-seller of a product and an em-
                                                 
13 The document, dated 1989 and entitled “Daniels’ Health and Safety Policy,” states that its purpose is 
“to provide safety information for the design, construction, operation, and maintenance of The Daniels 
Co.’s preparation facilities.”  Daniels produced the document in response to the Vaughns’ interrogatories 
and the document does not specify if it is in effect on all of Daniels’s jobs and the extent to which it is to 
be implemented when subcontractors are involved. 
 
14
ployee of the designer-seller’s subcontractor who assembled and installed the product before de-
livery to the final purchaser.  It was reasonably foreseeable that if Daniels did not use reasonable 
care to design a safe unassembled and uninstalled facility, those who handled it in the process of 
assembly and installation, including Vaughn, might be at risk of injury.  There is no policy rea-
son to immunize Daniels from liability to those who are injured as a result of negligent design.  
However, in addition to establishing the existence of a duty, in order to survive Daniels’s motion 
for summary judgment, the Vaughns must also establish breach, causation and damages.  The 
parties dispute whether Daniels’s breached its duty and whether the alleged breach was the 
proximate cause of Vaughn’s injuries.  Because we find there are genuine issues of material fact 
on these issues, we conclude that the trial court erred in granting Daniels’s motion for summary 
judgment on the Vaughns’ negligent design claim.  The trial court concluded that Vaughn mis-
used the sump and that misuse proximately caused Vaughn’s injuries.  Daniels cites the affida-
vits of Trimble and Daniels’s presidents in which the presidents state that the sump was not in-
tended to be used as a construction platform.  The Vaughns cite blueprints showing a ladder ac-
cess into the sump and argue that these blueprints show that it was foreseeable that workers 
would be on the sump.  Vaughn testified that he had worked on approximately twenty to twenty-
five sumps and that the Daniels design was different in that there was no steel overhead from 
which supports could hold the pipe during installation.  Vaughn also stated that the fine coal 
sump on the site had a handrail around the top.  We agree with the Vaughns that these facts cre-
ate an issue as to whether workers would be on the sump, whether Vaughn’s manner of installing 
the pipe constituted misuse of the sump, and if so, whether that misuse was the proximate cause 
of Vaughn’s injuries.  Therefore, the trial court erred in granting summary judgment to Daniels 
on the basis of misuse.   
The trial court also found summary judgment appropriate on the ground that Vaughn vol-
untarily incurred the risk of falling that came with not being properly tied off while working at 
heights.  Incurred risk acts as a complete bar to liability with respect to negligence claims 
brought under the PLA.  See I.C. § 34-20-6-3.  But, as explained above, the Vaughns’ negligence 
claim is not governed by the PLA and is subject to Indiana’s Comparative Fault Act, Indiana 
Code sections 34-51-2-1 through 34-51-2-19.  The relative contribution of Vaughn’s fault, if any, 
and Daniels’s negligent design, if any, are fact issues for trial.  We therefore reverse the trial 
court’s grant of summary judgment to Daniels on the Vaughns’ negligent design claim. 
 
15
Conclusion 
Transfer is granted.  The trial court’s grant of summary judgment to Solar is affirmed.  
The trial court’s grant of summary judgment to Daniels on the Vaughns’ negligent design claim 
is reversed.  Its grant of summary judgment to Daniels on the Vaughns’ other negligence claims 
and on Stephen Vaughn’s strict liability claim is affirmed.  This case is remanded to the trial 
court. 
Shepard, C.J., and Sullivan, J., concur. 
Dickson, J., dissents with separate opinion, in which Rucker, J., concurs. 
 
 
16
Dickson, Justice, dissenting. 
 
 
I dissent to express my strong disagreement with the Court's conclusion that a worker in-
stalling a defective and unreasonably dangerous product is deprived of the right to assert a strict 
liability claim under the Indiana Product Liability Act, Indiana Code § 34-20-2.  The plaintiff, 
Stephen Vaughn, should be permitted to bring this strict liability action as a "user" or "con-
sumer" under the Act.   
 
 
The majority's reasoning is based upon its belief that a person should not be considered a 
"user" or "consumer" of a product under the Product Liability Act unless the product is "in the 
final state called for by the arrangement between the buyer and the seller."  Slip opin at 11.  I 
disagree.  For purposes of the Act, the word "product" is defined to mean "any item or good that 
is personalty at the time it is conveyed by the seller to another party."  Ind. Code § 34-6-2-114.  
And "convey" should be given its plain and ordinary meaning, "to take or carry from one place to 
another; transport."  THE AMERICAN HERITAGE DICTIONARY 320 (2d ed. 1985) .  
 
In this case, the Daniels Company, Inc. arranged the shipment of the allegedly defective 
sump to the premises of Solar Sources, Inc. for installation there by Trimble Engineers and Con-
structors, Inc.  Applying these facts to the definition of "product," the uninstalled sump is an 
"item or good," and it was "personalty" at the time it was "conveyed" by Daniels to the Solar 
Sources site.   
 
 
Using this application of the statutory definition of "product," I conclude that in shipping 
the sump for installation, Daniels was "a person who sells, leases, or otherwise puts into the 
stream of commerce any product," and that Vaughn was a "user or consumer," thus governed by 
the Product Liability Act, which provides in relevant part as follows:  
a person who . . . puts into the stream of commerce any product in a defective condition 
unreasonably dangerous to any user or consumer . . . is subject to liability for physical 
harm caused by that product to the user or consumer . . . if . . . that user or consumer is in 
the class of persons that the seller should reasonably foresee as being subject to the harm  
caused by the defective condition. 
 
Ind. Code § 34-20-2-1 (formerly § 33-1-1.5-3) (emphasis added).  On the date of Vaughn's 
worksite injuries, December 12, 1995, the phrase "user or consumer" was defined, in relevant 
part, to include "any individual who uses . . . the product . . . or any bystander injured by the 
product who would reasonably be expected to be in the vicinity of the product during its rea-
sonably expected use."  Ind. Code § 34-6-2-29 (formerly § 33-1-1.5-2(1)).1  The Act also states 
that Section 1, quoted above, "applies although . . . the user or consumer has not bought the 
product from or entered into any contractual relation with the seller."  Ind. Code § 34-20-2-2(2) 
(formerly § 33-1-1.5-3).  Giving fair and reasonable meaning to the plain language of these statu-
tory provisions, it seems clear that Vaughn is entitled to the protection of the Act, certainly as a 
user and perhaps as a bystander.      
 
 
In Stegemoller v. ACandS, Inc., 767 N.E.2d 974, 976 (Ind. 2002), we construed the Act 
to apply to a worker's spouse who contracted a disease from asbestos fibers brought home on the 
person and clothing of her husband.  We emphasized consideration of the normal and reasonably 
expected use of the product and rejected the defendant's arguments that the spouse was not cov-
ered by the Act as "too narrow a view" and "not consistent with the Act."  Id.  Similarly, in But-
ler v. City of Peru, 733 N.E.2d 912, 919 (Ind. 2000), we found the Act could apply to a mainte-
nance worker injured while attempting to repair a product, holding that he fell under the defini-
tion of "user or consumer."  
 
 
After reviewing relevant Indiana appellate decisions, the Court of Appeals correctly con-
cluded that Vaughn was entitled to pursue an action against Daniels under the Act.  Noting our 
recent decisions, it held: 
     It is a logical extension of the [S]upreme [C]ourt's analysis to include in the definition 
of user or consumer a person who is injured while installing a product.  The installation 
of a product is the preparation of a product for safe operation, just as maintenance is in 
many cases. . . . The installation process was not only foreseeable but expected and rou-
tine . . . . If Vaughn was, in fact, injured by Daniels' defective product, it seems illogical 
that he would be precluded from pursuing a suit against Daniels simply because the sump 
was not completely installed when he was injured while trying to install it, particularly  
                                                 
1 When the Act was recodified in 1998, the language previously used to define "user or con-
sumer" was retained verbatim but rearranged, renumbered, and placed under the definition of "consumer," 
with a new separate definition of "user" as having "the same meaning as the term 'consumer,' which is set 
forth in section 29 of this chapter."  Ind. Code § 34-6-2-147.  
 
2
when the alleged defect affected his ability to install it safely. 
777 N.E.2d at 1127-28.  In my view, the Court of Appeals is exactly right.     
 
 
Just like the worker's spouse in Stegemoller and the maintenance worker in Butler, 
Vaughn, as an installer of the product in this case, should be entitled to present a strict liability 
claim under the Product Liability Act.  The coal sump manufacturer, Daniels, obviously knew 
that its product had to be installed and that the installation workers would be exposed to any 
product defects creating dangers in the installation process.  I cannot join the Court in adopting a 
rule that protects manufacturers from full strict liability accountability under the Act for injuries 
caused by their defective and unreasonably dangerous products and sustained by the workers 
who install them.   
 
I also disagree with the majority's conclusion finding Solar not liable despite the fact that 
Solar was charged with specific duties to provide certain railings under the Federal Mine Safety 
and Health Act of 1977.       
 
For these reasons, I dissent and believe that this Court should reverse in all respects the 
trial court's grant of summary judgment to Daniels and Solar.   
 
Rucker, J., concurs.   
 
 
3