## At the panel’s conference on October 21, 1997, following oral argument of the 1 

## case, Judge F loyd R. Gibson concurred in the result reached in this opinion. Judg e Gibson has been disabled by illness from reviewing the opinion, which is being filed in the interest of avoiding undue delay.



# United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________ No. 97-1267

___________ Maynard Cooperative Co., * * Appellant, * * v. * Appeal from the United States * District Court for the Zeneca, Inc., doing business as * Northern District of Iowa ICI Seeds, formerly doing business * as ICI Americans, Inc., * * Appellee. *

___________ Submitted: October 21, 1997 Filed: May 7,1998

___________ Before McMILLIAN, FLOYD R. GIBSON and LAY, Circuit Judges. 1

___________ McMILLIAN, Circuit Judge.

## The Hon orable Edward J. McManus, United States District Judge for th e 2 

## Northern District of Iowa. -2- Maynard Cooperative Co. (Maynard) appeals from a final order entered in the United States Distric t Co urt for the Northern District of Iowa, granting summary judgment in favor of Zeneca, Inc. (Zeneca), o n 2 Mayn ard’s claims of negligence, negligent misrepresentation, breach of an implied warranty of fitness, an d contribution or indemnity. Maynard Cooperative Co. v. Zeneca, Inc. , No. C94-2063 (N.D. Iowa Dec. 17, 1996) (here inafter

“slip op.”). For reversal, Maynard argues that the district court erred in dismissing its claims o f negligent mi srepresentation and contribution or indemnity under Iowa law. For the reasons stated below, w e affirm.
Jurisdiction
Juri sdiction in the district court was proper based upon 28 U.S.C. § 1332. Jurisdiction in this court is proper based upon 28 U.S.C. § 1291. The notice of appeal was timely filed pursuant to Fed R. App. P. 4(a). Background
In t he spring of 1993, Robert J. McSweeney, Sr., and Robert M. McSweeney, Jr. (the McSweeneys) , Iowa dairy farmers, hired

Maynard to assist them in an effort to “burn down” a failed alfalfa crop and replace it with a new crop in time to harvest within the same planting season. Maynard consulted Walt Osborne, the area representative for Zeneca, regarding the McSweeneys’ circumstances. Osborne suggested to Maynard that the McSweeneys apply two products, Gramoxone (one of Zeneca’s products) and 2,4-D (a herbicide produced by another manufacturer), wait seven days, and then replant. Maynard informed the McSweeneys of Osborne’ s re commendation and then implemented the plan suggested by Osborne. After the Gramoxone and 2,4-D were applied, the failed alfalfa plants were destroyed as

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expected. However, the new crop (planted s even days later) died, presumably as a result of chemical residue left in the soil.
The McSweeneys made a demand to Maynard for compensation of their losses. Maynard settled with them and obtai ned a release by the McSweeneys of all claims against Maynard and Zeneca. Maynard the n brought the present action against Zeneca i n state court, alleging negligence, negligent misrepresentation, breach of an implied wa

rranty of fitness, and contribution or indemnity. Maynard alleged that Osborne gave Maynard bad advice because the correct period of time to wait before replanting, after applying 2,4-D, is twenty-one days, not seven days. Zeneca removed the case to federal district court on diversity grounds and moved for summary judgment. The district court granted Zeneca’s motion and entered judg ment for Zeneca on all four counts. The district court held, in relevant part, that the negligent misrepresentation claim was barred under Iowa’s “economic loss ” doctrine for the following reasons.

The performance or service expected of the chemicals in this mat ter was that they would be applied to exterminate a crop, and that they would become harmless within seven days after application, in order that a new crop might be planted. It appears undisputed that the 2,4-D did not become harmless within seven days, and that the replanted crop was unsuccessful as a result. The record demonstrates that the question of how long the 2,4-D would take to become harmless wa s central to what the application was to accomplish, and therefore the failure to satisfy this performance level was not a hazard peripheral to the product’s function.

Sli p op. at 5-6 (citing Tomka v. Hoechst Celanese Corp. , 528 N.W.2d 103, 106 (Iowa 1995) ( Tomka )). Th e district court also re asoned that, because the economic loss doctrine operated as a legal bar to Zeneca’s liability for the alleged harm, Maynard could not recover on a theory of contribution or indemnity as a matter of law.

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Accordingly, the district court dismissed that claim in the complaint as well. Id. at 7. This appeal followed.
Discussion

We review a grant of summary judgment de novo . The question before the di strict court, and this court on appeal, is whether the record, when viewed in the light most favorable to the non-moving party, shows tha t there is no genuine issue as to any material fact and that t he moving party is ent itled to judgment as a matter of law. Fed. R. Civ. P. 56(c); see , e.g. , Celo tex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986); Anderson v
. Liberty L obby, Inc. , 477 U.S. 242, 249-50 (1986); Get Away Club, Inc. v
. Coleman , 969 F.2d 664, 666 (8th Cir. 1992); St. Paul Fire & Marine Ins. Co. v. FDIC , 968 F.2d 695, 699 (8th Cir. 1992). Where the unresolved issue s are pr imarily legal rather than factual, summary judgment is particularly appropriate. Crain v. Board of Police Comm'rs , 920 F.2d 140 2, 1405-06 (8th Cir. 1990). We review the distri ct court’s determinations of state law de novo . Salve Regina College v. Russell , 499 U.S. 225, 231 (1991). Maynard ar gues on appeal that the district court erred in holding, as a matter of Iowa law, that th e economic loss doctrine applie s under the facts of this case. Maynard argues that the economic loss doctrine only applies where the plaintiff’s claim is based upon the allege d failure of a product to meet the plaintiff’s commercial expectations. Here, Mayna rd argues, there is no issue as to whether the chemicals performed their commercially expected function of destroying the first crop. Rather, Maynard argues, the basis of its claim against Zeneca is the incorrect advice given by Osborne that replanting would be safe after seven days. Maynard argues that this cas e is clearly distinguishable from Tomka , in which the plaintiff was held not to have a tort claim against th e manufacturer

of a synthetic cattle growth hormone, based upon the failure of that product to perform up to the plaintiff’s expectations. In Tomka , the Iowa Supreme Court explained that “the distinguishing central feature of economic loss is .

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. . its relation to what the

product was supposed to accomplish.” 528 N.W.2d at 106; see also Nelson v. Todd’s Ltd. , 426 N.W.2d 120, 123-25 (Iowa 1988) (discussing economic loss doctrine). Moreover, Maynard contends, it has sufficiently established its claims of negligent misrepresentation and contributionor indemnity to withstand a motion for summary judgment. Maynard notes that the elements of a negligent misrepresentation claim under Iowa la w are defined in the Restatement (Second) of Torts § 552 (1977). See, e.g. , Haupt v. Miller , 514 N.W.2d 905, 909-10 (Iowa 1994) ( Haupt ). In Haupt , the Iowa Supreme Court stated:
Our

court has recognized the tort of negligent misrepresentation. . . . [S]ection 552 of the Restatement (Second) of Torts (1977) . . . details the necessary proof as follows: One who, in the course of his [or her] business, profession or other employment, or in any other transaction in which he [or she] has a pecuniary interest, supplies fals e informati onfor the guidance of others in their business transactions, is subject t o liab ility for pecuniary loss caused to them by their justifiable reliance upon th e informati on, if he [or she] fails to exercise reasonable care or competence in obtaining or communicating the information. May nardargues that, in the present case, the district court erred in dismissing its negligen t misrepresentation clai m on summary judgment because genuine issues of material fact remain as to whether: (1) Zenecawas in the business of supplying information; (2) Zeneca had a pecuniary interest in supplying th e information; (3) the information supplied was false; (4) Zeneca intended to supply the information for the benefit of Maynard or its customers; (5) Zeneca intended the information to influence Maynard or its customers; (6 ) Maynard acted in reasonable reliance upon the truth of

## In su pport of the assertions that Zeneca was in the business of supplying th e 3 

## info rmationin question and had a “pecuniary interest” in supplying the information , Maynard highlights Osborne’s statement in his deposition that part of his job was “[t]o in crease the market share of [his] company’s products.” Joint Appendix at 13 2 (deposition of Walt Osborne). -6- the information supplied by Zeneca; and (7) Maynard sustained damage as a proximate result of the fals e information supplied by Zeneca. 3 In addition, Maynard argues that it sufficiently established a claim for c ontribution or indemnity to survive Ze neca’s summary judgment motion because: Zeneca is a joint-tortfeasor vis-a-vis the harm done to th e McSweeneys; Maynard fully paid the McSweeneys and obtained a release of the McSweeneys’ claims against both Maynard and Zeneca; and the Mc Sweeneys had a viable negligent misrepresentation claim against Zeneca which was separate from Maynard’s claim.
We agree wit h the district court’s application of the economic loss doctrine to the present case. Th e district court correctly interpreted Maynard’s negligent misrepresentation claim as essentially based upon th e failure of 2,4-D to meet Mayn ard’s commercial expectation that the chemical would dissipate within seven days. The failure of th e 2,4-D to perform in that respect was the cause of the McSweeneys’ damages. Moreover , Maynardis seeking to recover compensation for a purely economic loss – namely, the amount of money it paid to compensate the McSweeneys. The dis tinction drawn by Maynard between the advice given by Zeneca and the product about which the advice was given is, in ou r opinion, a distinction without a difference. Cf. Bailey Farms, Inc. v. NOR-AM Chemical Co. , 27 F.3d 188, 191 -92 (6th Cir. 1994) (holding that a farmer had to seek a remedy under the UCC for consequent ial losses for property damage resulting from the failure of an agricultural product to p erform as expected, notwithstanding farmer’s argument that the product worked properly but he wa s mis informed

about its proper use). Even though Maynard may not have had a claim against Zeneca under th e UCC or contract theories, the

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economic l oss doctrine still applies to its negligent misrepresentation claim. In Tomka , 528 N.W.2d at 107-08, the Iowa Supreme Court enforced the economic loss doctrine to dismiss a negligent misrepresentation clai m ag ainst a manufacturer because the only damages sought by the plaintiff were economic damages which clearly fell within contract warranty theories, not tort theories, even though the plaintiff had no claim against th e manufacturer for breach of implied warranties.
We also h old that Maynard’s negligent misrepresentation claim fails as a matter of law under th e Restatement (Second) of Torts § 552, because Maynard cannot, as a matter of law, show at least three essential elements of its claim. First, Zeneca was not in the business of supplying information but, rather, offered advice and information merely as a service provided in connection with its retail operations, notwithstanding Osborne’s generalized statement that part of his job was “[t]o increase the market share of [his] company’s products.” Joint Appendix at 132 (deposition of Walt Osborne )

. See, e.g. , Meier v. Alfa-Laval, Inc. , 454 N.W.2d 576, 581 (Iowa 1990) (holding that the defenda nt, a seller and dealer of a milking machine, owed no duty of care for purposes of a negligent misrepresentation claim based upon statements made in connection with the machine’s repair, because the defendant was not in the business of supplying information) (cited in Haupt , 514 N.W.2d at 910). Second, Zene ca did not have a pecuniary interest in supplying information to Maynard regarding 2,4-D, because that product was manufactured b y a different company. Third, Maynard could not reasonably rely on the truth of the advice given by a Zeneca representative regarding the correct use of another manufacturer’s product. On this latter point, Maynard

could have, and clearly should have, consulted with the manufacturer of 2,4-D before using that product in the manner suggested by Osborne. Thus, it is beyond genuine dispute that Maynard’s reliance solely on Osborne’s advice regarding 2,4-D was not justified. In short, the district court correctly held that Maynard h as failed, as a matter of law, to establish any basis in tort for imposing liability on Zeneca for the losses

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sustained by the

McSweeneys and compensated by Maynard. Stated differently, Zeneca is not a joint-tortfeasor vis-a-vis the harm done to the McSweeneys, despite Mayna rd’s assertion to the contrary

. Consequently, Maynard cannot, as a matter of law , recover on a theory of contribution or indemnity.
Conclusion
Ac cordingly, we hold that the district court did not err in holding that Zeneca is entitled to judgment as a matter of law on Maynard’s claims of negligent misrepresentation and contribution or indemnity. The order of the district court is affirmed. A true copy.
Attest: CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.