Court of Appeals of Indiana | Opinion 18A-PL-2368 | July 24, 2019 Page 1 of 25

ATTORNEYS FOR APPELLANT

Cameron A. Morgan

Michelle A. Cobourn-Baurley

McNeely Stephenson

Shelbyville, Indiana

ATTORNEYS FOR APPELLEE

BANE-WELKER EQUIPMENT,

LLC

Daniel W. Glavin

Kathleen M. Erickson

O’Neill McFadden & Willett LLP

Schererville, Indiana

ATTORNEYS FOR APPELLEE CNH

INDUSTRIAL AMERICA, LLC

Nicholas C. Pappas 

Maggie L. Smith 

Jessica Williams Schnelker

Frost Brown Todd LLC

Indianapolis, Indiana

I N T H E

COURT OF APPEALS OF INDIANA

Indiana Farm Bureau as 

Subrogee of Chester Lemler, 

Garry Lemler, and Zak Lemler,

Appellant-Plaintiff,

v.

CNH Industrial America, LLC 

and Bane-Welker Equipment, 

LLC,

Appellees-Defendants.

July 24, 2019

Court of Appeals Case No.

18A-PL-2368

Appeal from the 

Marshall Circuit Court

The Honorable 

Curtis D. Palmer, Judge

Trial Court Cause No.

50C01-1710-PL-48
Court of Appeals of Indiana | Opinion 18A-PL-2368 | July 24, 2019 Page 2 of 25

Kirsch, Judge.

[1] Indiana Farm Bureau Insurance (“Farm Bureau”) appeals the trial court’s grant 

of summary judgment in favor of CNH Industrial America, LLC (“CNH 

Industrial”) and Bane-Welker Equipment, LLC (“Bane-Welker”) in Farm 

Bureau’s action seeking subrogation from CNH Industrial and Bane-Welker for 

payment Farm Bureau paid to its insureds for damages to farm equipment. On 

appeal, Farm Bureau contends that the trial court erred in granting summary 

judgment in favor of Bane-Welker and CNH Industrial, specifically raising the 

following issues:

I. Whether Bane-Welker effectively disclaimed the implied 

warranty of merchantability by the language used in the 

documents signed at the time of purchase; 

II. Whether the Corn Head is considered “other property” 

under Indiana law such that tort recovery for damages to 

the Corn Head is barred by the economic loss doctrine; 

and 

III. Whether Farm Bureau’s claim for negligent service of the 

Combine is barred by the economic loss doctrine.

[2] We affirm.
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Facts and Procedural History1

[3] Tri L Farms (“the Farm”) was formed in 1985 and operates as a commercial 

farm, growing, harvesting, and selling corn and soybeans. Appellant’s App. Vol. 

3 at 73-75, 100. The Farm is owned and operated by Garry Lemler (“Garry”)

and Zak Lemler (“Zak”) in equal partnership with their father, Chester Lemler. 

Id. at 73-74, 99-100. In its operation as a commercial farm, the Farm uses a 

combine to harvest its corn and soybean crops. Id. at 81. A combine is “a 

harvesting machine that heads, threshes, and cleans grain while moving over a 

field.” https://www.merriam-webster.com/dictionary/combine (last visited 

May 30, 2019). When harvesting crops, a combine must have a “head” 

attached to the front of the combine, which feeds the crop into the combine so 

that the combine can process and harvest the crop. Appellant’s App. Vol. 3 at 81-

82. When the Farm harvests its corn crops, it uses a “corn head” attached to 

the combine, and without the corn head attached, a combine cannot harvest 

corn. Id. at 81-82, 91-92.

[4] The Farm likes to replace its combines and corn heads every two or three years, 

and, in preparation for the 2015 harvest season, the Farm decided to trade in its 

existing combine and corn head and purchase updated models. Id. at 101-02. 

At that time, Garry was a salesman for Bane-Walker, in addition to owning and 

operating the Farm. Id. at 77. Prior to the beginning of the 2015 harvest 

 

1 Oral argument was heard on this case on May 16, 2019 in the Indiana Court of Appeals courtroom in 

Indianapolis, Indiana. We commend counsel on the quality of their written and oral advocacy. 
Court of Appeals of Indiana | Opinion 18A-PL-2368 | July 24, 2019 Page 4 of 25

season, Garry arranged for the Farm to purchase from Bane-Welker a used 

Case IH 8230 combine (“the Combine”) in January 2015 and a used Case IH 

4412F-30 corn head (“the Corn Head”) in August 2015. Id. at 84; Appellant’s 

App. Vol. 4 at 70. Both the Combine and the Corn Head had been 

manufactured by CNH Industrial. Appellant’s App. Vol. 2 at 20. CNH Industrial 

had no involvement in the 2015 retail transactions between Bane-Welker and 

the Farm.

[5] As part of the purchase of both the Combine and the Corn Head, the Farm 

executed, in January 2015, a Retail Purchase Order and Security Agreement 

(“the Purchase Order”) and a Retail Installment Sale Contract and Security 

Agreement (“the Sale Contract”) for the Combine and, in August 2015, a Retail 

Purchase Order and Security Agreement (“the Purchase Order”) and a Retail 

Installment Sale Contract and Security Agreement (“the Sale Contract”) for the 

Corn Head. Appellant’s App. Vol. 3 at 56-58, 118-20; Appellant’s App. Vol. 4 at 70-

71, 73-75. Garry completed these forms on behalf of Bane-Welker, as the 

salesperson on the transactions, and Zak signed the documents on behalf of the 

Farm. Appellant’s App. Vol. 3 at 86-87, 105-06.

[6] The Purchase Order for the Combine contained the following provisions, 

informing the Farm that it must: “1. Read this contract before you sign it;” and 

“4. The additional terms and conditions set forth on the reverse side are a part of 

this contract and are incorporated herein by reference.” Id. at 56 (emphasis 

added). On the reverse side of the Purchase Order in the center of the page, 

under the headings, “WARRANTY” and “USED EQUIPMENT,” which 
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were in all caps and bold typeface, the following language appeared: “USED 

EQUIPMENT covered by this Purchase Order is sold AS-IS, WHERE IS, 

WITH NO REPRESENTATIONS OR WARRANTIES, other than those 

stated on the reverse side for equipment 5 years old or newer.” Id. at 58. The 

Purchase Order for the Corn Head contained identical language. Appellant’s 

App. Vol. 4 at 70-71. Garry and Zak testified they received these terms and 

conditions on behalf of the Farm when they received the Purchase Order and 

that they understood the terms and conditions associated with the “USED 

EQUIPMENT” warranty provisions applied to their purchase. Appellant’s App. 

Vol. 3 at 87-88, 107-08. Both Garry and Zak also stated that they were aware 

and understood that the Combine, because it was used, did not come with any 

warranties. Id. at 80-81, 104-05.

[7] In addition to the Purchase Orders, the Farm also executed the Sale Contracts 

as part of its purchase of the Combine and the Corn Head. Id. at 118-20; 

Appellant’s App. Vol. 4 at 73-75. Each of the Sale Contracts spelled out the 

financial terms and secured the financial consideration of the transaction. 

Appellant’s App. Vol. 3 at 66. The first page of the Sale Contract for the Combine 

provided, just above the signature lines, “DO NOT SIGN THIS BEFORE 

YOU READ THE TERMS ON THE THREE AGREEMENT PAGES (PLUS 

ANY ADDENDUMS), EVEN IF OTHERWISE ADVISED.” Id. at 118. At 

the top of the second page of the Sale Contract, it specifically stated in all 

capital letters “NO WARRANTY.” Id. at 119. It further stated, “THE 

EQUIPMENT IS SOLD AS IS AND WITH ALL FAULTS . . . . NEITHER 
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SELLER NOR MANUFACTURER MAKE ANY OTHER 

REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AND 

SPECIFICALLY DISCLAIM THE IMPLIED WARRANTIES OF 

MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE.” 

Id. The Sale Contract for the Corn Head contained identical language. 

Appellant’s App. Vol. 4 at 73-74. Garry and Zak acknowledged receiving all three 

pages of the Sale Contract. Appellant’s App. Vol. 3 at 89, 110-11.

[8] On October 29, 2016, the Combine and the attached Corn Head were being 

used to harvest the Farm’s corn crops when the Combine caught fire, which 

resulted in complete destruction of the Combine and the Corn Head, allegedly 

causing damage in the amount of $357,699. Appellant’s App. Vol. 2 at 21. At the 

time of this property damage, the Combine and the Corn Head were insured 

under a single Farmowners Policy issued by Farm Bureau. Appellant’s App. Vol. 

4 at 7. Farm Bureau provided payment to the Farm for the property damage to 

the Combine and the Corn Head and then filed a complaint, as subrogee of the 

Lemlers, against CNH Industrial and Bane-Welker to recover that payment. 

Appellant’s App. Vol. 2 at 19-25. 

[9] In the complaint, Farm Bureau asserted a product liability claim, seeking tort 

damages against CNH Industrial and Bane-Welker for the damage to the 

Combine and the Corn Head. Id. Farm Bureau also asserted a breach of 

implied warranty of merchantability against Bane-Welker and a separate 

negligence claim against Bane-Welker for improperly servicing the Combine 

after purchase. Id. CNH Industrial and Bane-Welker sought summary 
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judgment on the product liability claim, arguing the tort claim for property 

damage to the Combine and the Corn Head was barred by the economic loss 

doctrine. Appellant’s App. Vol. 3 at 27-29; Appellant’s App. Vol. 4 at 97-100. In 

response, Farm Bureau conceded that the economic loss doctrine barred any 

tort claim for property damage to the Combine but asserted that its claim for 

damage to the Corn Head was not barred by the economic loss doctrine 

because the Corn Head is considered “other property,” which is not precluded 

from recovery of damages. Appellant’s App. Vol. 3 at 157-160. Bane-Welker also 

sought summary judgment against the breach of warranty and negligence 

claims asserted by Farm Bureau, arguing that all implied warranties had been 

disclaimed and that the negligence claim against it was barred by the economic 

loss doctrine. Id. at 15-37; Appellant’s App. Vol. 4 at 96-108. The trial court 

granted summary judgment in favor of CNH Industrial and Bane-Welker as to 

all of Farm Bureau’s claims. Appellant’s App. Vol. 2 at 17. Farm Bureau now 

appeals. 

Discussion and Decision

[10] When reviewing the grant of summary judgment, our standard of review is the 

same as that of the trial court. FLM, LLC v. Cincinnati Ins. Co., 973 N.E.2d 

1167, 1173 (Ind. Ct. App. 2012) (citing Wilcox Mfg. Grp., Inc. v. Mktg. Servs. of 

Ind., Inc., 832 N.E.2d 559, 562 (Ind. Ct. App. 2005)), trans. denied. We stand in 

the shoes of the trial court and apply a de novo standard of review. Id. (citing 

Cox v. N. Ind. Pub. Serv. Co., 848 N.E.2d 690, 695 (Ind. Ct. App. 2006)). Our 

review of a summary judgment motion is limited to those materials designated 
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to the trial court. Ind. Trial Rule 56(H); Thornton v. Pietrzak, 120 N.E.3d 1139, 

1142 (Ind. Ct. App. 2019), trans. denied. Summary judgment is appropriate only 

where the designated evidence shows there are no genuine issues of material 

fact and the moving party is entitled to judgment as a matter of law. T.R. 

56(C). For summary judgment purposes, a fact is “material” if it bears on the 

ultimate resolution of relevant issues. FLM, 973 N.E.2d at 1173. We view the 

pleadings and designated materials in the light most favorable to the nonmoving party. Id. Additionally, all facts and reasonable inferences from those 

facts are construed in favor of the non-moving party. Id. (citing Troxel Equip. 

Co. v. Limberlost Bancshares, 833 N.E.2d 36, 40 (Ind. Ct. App. 2005), trans. 

denied). The initial burden is on the moving party to demonstrate the absence of 

any genuine issue of fact as to a determinative issue, at which point the burden 

shifts to the non-movant to come forward with contrary evidence showing an 

issue for the trier of fact. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). 

[11] A trial court’s grant of summary judgment is clothed with a presumption of 

validity, and the party who lost in the trial court has the burden of 

demonstrating that the grant of summary judgment was erroneous. Henderson v. 

Reid Hosp. and Healthcare Servs., 17 N.E.3d 311, 315 (Ind. Ct. App. 2014), trans. 

denied. We will affirm upon any theory or basis supported by the designated 

materials. Id. When a trial court grants summary judgment, we carefully 

scrutinize that determination to ensure that a party was not improperly 

prevented from having his or her day in court. Id.
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I. Implied Warranty of Merchantability

[12] Indiana’s version of the Uniform Commercial Code provides:

Where the seller at the time of contracting has reason to know 

any particular purpose for which the goods are required and that 

the buyer is relying on the seller’s skill or judgment to select or 

furnish suitable goods, there is, unless excluded or modified 

under IC 26-1-2-316, an implied warranty that the goods shall be 

fit for such purpose.

Ind. Code § 26-1-2-315. The implied warranty of merchantability is imposed by 

operation of law for the protection of the buyer, and it must be liberally 

construed in favor of the buyer. Gared Holdings, LLC v. Best Bolt Products, Inc., 

991 N.E.2d 1005, 1013 (Ind. Ct. App. 2013) (citing Woodruff v. Clark Cty. Farm 

Bureau Coop. Ass’n, 153 Ind. App. 31, 43, 286 N.E.2d 188, 194-95 (1972)), trans. 

denied. Indiana Code section 26-1-2-316 addresses the exclusion or 

modification of warranties and states in pertinent part:

(2) Subject to subsection (3), to exclude or modify the implied 

warranty of merchantability or any part of it the language must 

mention merchantability and in case of a writing must be 

conspicuous, and to exclude or modify any implied warranty of 

fitness the exclusion must be by a writing and conspicuous. 

Language to exclude all implied warranties of fitness is sufficient 

if it states, for example, that “There are no warranties which 

extend beyond the description on the face hereof.”

(3) Notwithstanding subsection (2):

(a) unless the circumstances indicate otherwise, all implied 

warranties are excluded by expressions like “as is,” “with all 
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faults,” or other language which in common understanding calls 

the buyer’s attention to the exclusion of warranties and makes 

plain that there is no implied warranty.

Ind. Code § 26-1-2-316(2), (3)(a). 

[13] Farm Bureau argues that the implied warranty of merchantability was not 

disclaimed by the documents signed by the Farm at the time of purchase of the 

Combine and the Corn Head. Specifically, Farm Bureau contends that the “as 

is” language utilized by Bane-Welker was not sufficient to disclaim the implied 

warranty of merchantability because it did not include the word 

“merchantability,” which is required under Indiana Code section 26-1-2-316(2)

and that the word “merchantability” must be used in the disclaimer to be 

effective. Farm Bureau further asserts that Bane-Welker’s attempted disclaimer 

was not conspicuous because it did not bring the buyer’s attention to the 

language purporting to disclaim the implied warranty of merchantability. 

Therefore, Farm Bureau maintains that attempted disclaimers used by BaneWelker did not effectively disclaim the implied warranty of merchantability.

[14] Initially, we note that Farm Bureau also argues that the Sale Contracts, through 

which the Combine and the Corn Head were financed through CNH Industrial 

Capital,2 and the language contained within that purports to disclaim the 

implied warranty of merchantability, have no impact on the breach of implied 

 

2 Appellee CNH Industrial America, LLC is an entity separate from CNH Industrial Capital.
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warranty of merchantability claim because its claim is against Bane-Welker and 

not CNH Industrial Capital and there is no agency relationship between BaneWelker and CNH Industrial Capital. Farm Bureau presents no authority for its 

contention that an agency relationship between Bane-Welker and CNH 

Industrial Capital must exist in order for the Sale Contracts to be used to prove 

disclaimer. However, even assuming, without deciding, that the Sale Contract 

cannot be used to determine if the implied warranty of merchantability has been 

disclaimed, we conclude that the language contained in the Purchase Order was 

sufficient to disclaim the implied warranty. 

[15] Contrary to Farm Bureau’s assertions, Indiana Code section 26-1-2-316 does 

not require the inclusion of the word “merchantability” to make a disclaimer of 

the implied warranty of merchantability effective. Although subsection (2) of 

the statute states that in order “to exclude or modify the implied warranty of 

merchantability or any part of it[,] the language must mention 

merchantability,” it also provides that the subsection is, “[s]ubject to subsection 

(3).” Ind. Code § 26-1-2-316(2). Subsection (3) states in pertinent part, 

“Notwithstanding subsection (2): (a) unless the circumstances indicate 

otherwise, all implied warranties are excluded by expressions like ‘as is,’ ‘with 

all faults,’ or other language that in common understanding calls the buyer’s 
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attention to the exclusion of warranties and makes plain that there is no implied 

warranty.” Ind. Code § 26-1-2-316(3)(a).3 

[16] Here, the Purchase Order contained the following provisions, informing the 

Farm that it must: “1. Read this contract before you sign it;” and “4. The 

additional terms and conditions set forth on the reverse side are a part of this 

contract and are incorporated herein by reference.” Appellant’s App. Vol. 3 at 56 

(emphasis added). On the reverse side of the Purchase Order, under the 

headings, “WARRANTY” and “USED EQUIPMENT,” which were in all 

caps and bold typeface, the following language appeared: “USED 

EQUIPMENT covered by this Purchase Order is sold AS-IS, WHERE IS, 

WITH NO REPRESENTATIONS OR WARRANTIES, other than those 

stated on the reverse side for equipment 5 years old or newer.” Id. at 58. The 

Purchase Order for the Corn Head contained identical language. Appellant’s 

App. Vol. 4 at 70-71. Under subsection (3) of the statute, this language was 

sufficient to disclaim the implied warranty of merchantability.

[17] Farm Bureau cites to Woodruff v. Clark County Farm Bureau Cooperative

Association, Inc., 153 Ind. App. 31, 286 N.E.2d 188 (Ind. Ct. App. 1972) to 

support its assertion that the word “merchantability” must be used in order for a 

disclaimer to be effective. In that case, the seller was found not to have 

effectively disclaimed the implied warranty of merchantability. Id. at 198. 

 

3 We note that subsection (3) also contains (b)-(e), which are not applicable to the present case.
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However, contrary to Farm Bureau’s assertion that the “Woodruff court 

ultimately found that even though the seller receipt states ‘no warranties, 

express or implied, have been made’ and that acceptance was ‘as is,’ this 

language was insufficient to disclaim the implied warranty of merchantability as 

it failed to mention ‘merchantability’ in the language,” Appellant’s Br. at 14, this 

was not what the Woodruff case held. In that case, the attempted disclaimer did 

not contain the word “merchantability” as required under Indiana Code section 

26-2-1-2-316(2), but it did contain the words “as is,” which is allowed under 

subsection (3). Id. at 196. After determining that the “as is” language was 

contained in the sales receipts given to the buyer, the court went on to ascertain 

whether the conspicuousness requirement from subsection (2) should apply to 

the “as is” language requirement under subsection (3). Id. The court ultimately 

determined that the conspicuousness requirement should apply to subsection (3) 

and found that the language included in the sales receipts was not conspicuous 

and was insufficient as a matter of law to negate any implied warranties. Id. at 

198.

[18] Farm Bureau also argues that the attempted disclaimer language is not 

conspicuous and, therefore, not effective to disclaim the implied warranty of 

merchantability. We disagree. “Conspicuous” is defined as: 

A term or clause is conspicuous when it is so written that a 

reasonable person against whom it is to operate ought to have 

noticed it. A printed heading in capitals (as: 

NONNEGOTIABLE BILL OF LADING) is conspicuous. 

Language in the body of a form is conspicuous if it is in larger or 

other contrasting type or color.
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Ind. Code § 26-1-1-201(10). “Whether the exclusionary language is 

‘conspicuous’ is a question of law for the court.” Woodruff, 286 N.E.2d at 197. 

The purpose of requiring the exclusionary language to be conspicuous is to 

ensure that the attention of the buyer can reasonably be expected to be brought 

to the language. Id. at 198. In support of its argument, Farm Bureau again 

cites to Woodruff, where the Court held that the language used was not 

conspicuous because it “was not drawn to the attention of Woodruff at the time 

of delivery, and . . . there was nothing contained within the body of the 

purported disclaimers drawing Woodruff’s attention to the exclusionary 

language or making that language conspicuous in and of itself.” Id. Farm 

Bureau also contends that the language used by Bane-Welker in the Purchase 

Order was not conspicuous because it appears on the back side of the Purchase 

Order and Bane-Welker, through its salesman, Garry, did not advise the Farm 

of the language on the back side of the document or inform the Farm of the 

meaning of the language. 

[19] The disclaiming language in the Purchase Order was located on the back side of 

the document, which the Farm signed at the time of purchase. Right above the 

signature line, there was language that informed the buyer that he should read 

this contract before signing it and that there were additional terms and 

conditions set forth on the reverse side that were part of this contract and were 

incorporated by reference. Appellant’s App. Vol. 3 at 56. On the reverse side of 

the Purchase Order in the canter of the page, under the headings, 

“WARRANTY” and “USED EQUIPMENT,” which were in all caps and bold 
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typeface, the following language appeared: “USED EQUIPMENT covered by 

this Purchase Order is sold AS-IS, WHERE IS, WITH NO 

REPRESENTATIONS OR WARRANTIES, other than those stated on the 

reverse side for equipment 5 years old or newer.” Id. at 58. The pertinent 

words “AS-IS, WHERE IS, WITH NO REPRESENTATIONS OR 

WARRANTIES” were in all caps and larger than the surrounding text and 

appeared under headings which were in all caps and bold typeface. Id. We 

conclude that the disclaimer language used by Bane-Welker in the Purchase 

Order was conspicuous as a matter of law, and the language in the Purchase 

Order effectively disclaimed the implied warranty of merchantability.

II. “Other Property” Under the Economic Loss Doctrine

[20] Under the “economic loss doctrine,” contract is the sole remedy for the failure 

of a product or service to perform as expected. Gunkel v. Renovations, Inc., 822 

N.E.2d 150, 152 (Ind. 2005). Indiana law under the Products Liability Act and 

general negligence law states that where the injury to the plaintiff is from a 

defective product or service, the defendant is liable under a tort theory if the 

defect causes personal injury or damage to property other than the product or 

service itself. Indianapolis-Marion Cty. Pub. Library v. Charlier Clark & Linard, 

P.C., 929 N.E.2d 722, 726 (Ind. 2010) (citing Gunkel, 822 N.E.2d at 153). 

Indiana cases further hold that the defendant is not liable under a tort theory for 

any purely economic loss caused by its negligence (including, in the case of a 

defective product or service, damage to the product or service itself). Id. at 726-

27. Therefore, the “economic loss doctrine” precludes tort liability for purely 
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economic loss -- that is, pecuniary loss unaccompanied by any property damage 

or personal injury (other than damage to the product or service itself). Id. The 

doctrine “reflects that the resolution of liability for purely economic loss caused 

by negligence is more appropriately determined by commercial rather than tort 

law.” Id. at 729. As our Supreme Court observed in Gunkel, “The central 

theory underlying ‘economic loss’ is that the law should permit the parties to a 

transaction to allocate the risk that an item sold, or a service performed does 

not live up to expectations.” Gunkel, 822 N.E.2d at 155.

[21] “[C]ontract law governs damage to the product or service itself and purely 

economic loss arising from the failure of the product or service to perform as 

expected.” Id. at 153. “Indiana law under the Products Liability Act and under 

general negligence law is that damage from a defective product or service may 

be recoverable under a tort theory if the defect causes personal injury or damage 

to other property, but contract law governs damage to the product or service 

itself and purely economic loss arising from the failure of the product or service 

to perform as expected.” Id. (emphasis added). In Gunkel, our Supreme Court 

explored what constitutes “other property” and “aligned [itself] with the courts 

that have concluded that the ‘product’ is the product purchased by the plaintiff, 

not the product furnished by the defendant.” Id. at 154-55. 

[22] Farm Bureau contends that the Corn Head is “other property,” and, therefore, 

the damages to it should be recoverable under a tort theory and not precluded 

under the economic loss doctrine. Because the Corn Head should be

considered to be “other property,” Farm Bureau asserts that it can pursue a 
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products liability claim against CNH Industrial, and the trial court erred in 

granting summary judgment on its claim against CNH Industrial. Although 

Indiana courts have not yet determined how the economic loss doctrine and the 

“other property” exception should apply to farm equipment, Farm Bureau 

maintains that the cases in which the courts have applied this area of the law in 

the context of consumer products and buildings provide guidance on how this 

issue of first impression should be determined. 

[23] Farm Bureau relies on two Indiana cases to support its argument, Gunkel and 

Guideone Insurance Co. v. U.S. Water Systems, Inc., 950 N.E.2d 1236 (Ind. Ct. 

App. 2011). In Gunkel, the plaintiffs contracted with Renovations, Inc., for the 

construction of a home, and six months later, the plaintiffs contracted with a 

different company, J&N Stone, to install a stone façade on the home. 822 

N.E.2d at 151. After water entered through gaps in the stone façade, the 

plaintiffs sued J&N for negligence, seeking to recover for damage to walls, 

ceilings, doors, floors, drywall, carpet, and carpet padding caused by the leaking 

façade. Id. J&N sought summary judgment on the ground that the plaintiffs 

sought purely economic damages, which were not available under a negligence 

theory. Id. at 152. The trial court granted summary judgment for J&N. Id. On 

transfer, our Supreme Court concluded that the plaintiffs could not recover in 

tort for damages to the façade itself, but could recover in tort for damage to the 

other parts of the home as damage to “other property,” aligning itself with the 

courts that have concluded that “the ‘product’ is the product purchased by the 

plaintiff, not the product furnished by the defendant.” Id. at 155-57. The 
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Supreme Court found that the product or service purchased from J&N was the 

stone façade added to the exterior of the plaintiffs’ home and that J&N installed 

the façade under an arrangement with the plaintiffs that was independent of the 

contract with Renovations, Inc. to build the home. Id. at 156.

[24] In Guideone, the homeowners purchased a water system and had it installed in 

their home. 950 N.E.2d at 1239-40. Shortly after installation, the water system 

leaked and caused water damage to the home, and after compensating the 

homeowners, their insurance company sought subrogation from the retailer and 

the installer of the water system. Id. at 1240. The installer moved to dismiss, 

contending that the economic loss doctrine precluded recovery, which the trial

court granted. Id. at 1241. A panel of this court found that the trial court erred 

in granting the motion to dismiss because, although the economic loss doctrine 

would preclude recovery for damage to the water system itself, the “other 

property” exception permitted recovery for the flood damage to the home 

because the damaged parts of the home were acquired separately from the water 

system and were separate and distinct items from the water system. Id. at 1245.

[25] Our Supreme Court again had an opportunity to decide a case involving the 

economic loss doctrine and the “other property” exception in IndianapolisMarion County Public Library. There, the Library contracted with multiple 

entities to renovate and expand its downtown Indianapolis library facility, and 

after significant construction had occurred, it learned the accompanying 

parking garage contained construction and design defects that cost the Library 

forty to fifty million dollars to cure. 929 N.E.2d at 725. The Library brought a 
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lawsuit against the various different architects, general contractors, and 

engineers alleging negligence, and the defendants argued the negligence claims 

against them were barred by the economic loss doctrine. Id. at 726. In its 

opinion finding that the economic loss doctrine did apply to bar the claims, our 

Supreme Court recognized that Gunkel agreed with other courts that had 

concluded that the “product” is the product purchased by the plaintiff, not the 

product furnished by the defendant and reasoned:

“[o]nly the supplier furnishing the defective property or service is 

in a position to bargain with the purchaser for allocation of the 

risk that the product or service will not perform as expected. If a 

component is sold to the first user as a part of the finished 

product, the consequences of its failure are fully within the 

rationale of the economic loss doctrine. It therefore is not ‘other 

property.’” 

Id. at 731 (citing Gunkel, 822 N.E.2d at 154). The Supreme Court found that 

the product purchased by the Library was a complete renovation and expansion 

of all the components of its facility as part of a single, highly-integrated 

transaction. Id. The Court further held that the product “purchased from the 

Defendants was an integral part of the entire library construction project, not 

independent from it. Any damages alleged to have resulted from the 

Defendants’ negligence were to the ‘product’ the Library purchased, not to 

‘other property.’ The economic loss doctrine applies.” Id. at 732.

[26] In applying Indiana law regarding the “other property” exception, the question

is what product was purchased by the Farm. Here, the Farm purchased a 
Court of Appeals of Indiana | Opinion 18A-PL-2368 | July 24, 2019 Page 20 of 25

Combine and Corn Head to be used to harvest corn. The Farm purchased both 

the Combine and the Corn Head from the same seller, and both the Combine 

and the Corn Head were manufactured by the same manufacturer. In the 

months leading up to the 2015 Harvest Season, the Farm purchased the 

Combine in January and the Corn Head in August. Therefore, although the 

Combine and the Corn Head were purchased several months apart, the Farm 

contracted with the same seller to purchase equipment for the stated purpose of 

harvesting corn. Testimony established that without an attached Corn Head, 

the Combine cannot harvest corn,

4 and although the Combine itself can be 

driven without a Corn Head, it is worthless for harvesting corn without a Corn 

Head.

5

 The product purchased by the Farm was a functioning Combine and 

the Corn Head was intended to be part of that bargained-for product. 

 

4

“Q: In particular, if you’re harvesting corn, you’re not going to be able to harvest corn without a corn head? 

A: That’s correct.” Appellant’s App. Vol. 3 at 91-92.

5 Q: In other words, if you drove a combine through a field and it didn’t have a corn head on it in the 

cornfield, you couldn’t do anything with it? 

A: You’re wasting your time. 

Appellant’s App. Vol. 3 at 81-82.

Q: [I]f no implement is attached to the front of that combine, you can drive it around the field, right? 

A: Sure. 

Q: [But] It’s not going to do anything? 

A: It’s not going to do anything. 

Q: So you need some sort of implement attached to the front, right? 

A: Correct. 

Id. at 91-92.
Court of Appeals of Indiana | Opinion 18A-PL-2368 | July 24, 2019 Page 21 of 25

[27] “The theory underlying the economic loss doctrine is that the failure of a 

product or service to live up to expectations is best relegated to contract law and 

to warranty either express or implied.” Gunkel, 822 N.E.2d at 155. The 

expectation here was that the Farm would obtain a working combine and corn 

head to use to harvest corn for its commercial farm business. It, therefore, 

purchased both the Combine and the Corn Head from Bane-Welker with the 

intent to use them for that purpose. However, the Combine caught fire, and the 

damages incidental to this fire, were a disappointed commercial expectation of 

properly functioning farm equipment. The Corn Head and Combine were thus 

“an integral part” of the harvesting equipment purchased by the Farm. See 

Indianapolis-Marion Cty. Pub. Library, 929 N.E.2d at 732 (finding the product 

“purchased from the Defendants was an integral part of the entire library 

construction project, not independent from it.”). Accordingly, any damages 

alleged to have resulted from the fire “were to the ‘product’ the [Farm] 

purchased, not to ‘other property.’” Id. We, therefore, conclude that the Corn 

Head is not “other property,” and the economic loss doctrine applies, thus 

barring Farm Bureau’s recovery of tort claim damages against CNH Industrial. 

III. Negligent Service Claim

[28] Farm Bureau argues that the economic loss doctrine does not apply to its claims 

of negligence against Bane-Welker for the improper service of the Combine. 

Farm Bureau contends that Bane-Welker regularly performed service and 

maintenance on the Combine and was negligent in this service because BaneWelker did not inform the Farm of known problems with the chopper bearings 
Court of Appeals of Indiana | Opinion 18A-PL-2368 | July 24, 2019 Page 22 of 25

or recommend additional maintenance to address the problems. Appellant’s Br. 

at 25. Farm Bureau, therefore, argues that its claim against Bane-Welker for 

the negligent servicing of the Combine are separate from its claims under the 

Products Liability Act and not barred from the economic loss doctrine. 

Because this claim is not barred, Farm Bureau alleges that summary judgment 

was not appropriate for this negligence claim because Bane-Welker did not 

present evidence to show that the company met its duty of care and the 

resolution of the negligent servicing claim is a question of fact for the jury.

[29] “The central theory underlying ‘economic loss’ is that the law should permit the 

parties to a transaction to allocate the risk that an item sold, or a service 

performed does not live up to expectations.” Gunkel, 822 N.E.2d at 155. The 

economic loss doctrine is not limited to the sale of goods. Id. “In general, a

claim that a product or service did not perform as expected is best left to 

contract law remedies.” Id. Therefore, Indiana law holds that “a defendant is 

not liable under a tort theory for any purely economic loss caused by its 

negligence (including, in the case of a defective product or service, damage to 

the product or service itself).” Indianapolis-Marion Cty. Pub. Library, 929 N.E.2d 

at 726-27. 

[30] Here, Farm Bureau is contending that a service performed by Bane-Welker, the 

maintenance of the Combine, was performed negligently and did not live up to 

expectations. However, “a claim that a product or service did not perform as 

expected is best left to contract law remedies.” Gunkel, 822 N.E.2d at 155. We, 
Court of Appeals of Indiana | Opinion 18A-PL-2368 | July 24, 2019 Page 23 of 25

therefore, conclude that Farm Bureau’s claims of negligent servicing are barred 

by the economic loss doctrine.

[31] In conclusion, after a review of the record and the applicable law, we find that 

Bane-Welker properly disclaimed the implied warranty of merchantability with 

the language used in the Purchase Order. We also conclude that the Corn 

Head is not “other property,” and therefore, the economic loss doctrine applies 

to bar Farm Bureau’s recovery of tort claim damages. Further, Farm Bureau’s 

claim of negligent servicing against Bane-Welker is barred by the economic loss 

doctrine. The trial court did not err in granting summary judgment in favor of 

Bane-Welker and CNH Industrial.

[32] Affirmed.

Riley, J., concurs.

Robb, J., concurs in part and dissents in part with separate opinion.
Court of Appeals of Indiana | Opinion 18A-PL-2368 | July 24, 2019 Page 24 of 25

I N T H E

COURT OF APPEALS OF INDIANA

Indiana Farm Bureau as Subrogee 

of Chester Lemler, Garry Lemler, 

and Zak Lemler,

Appellant-Plaintiff,

v.

CNH Industrial America, LLC 

and Bane-Welker Equipment, 

LLC,

Appellees-Defendants,

Court of Appeals Case No.

18A-PL-2368

Robb, Judge, concurring in part and dissenting in part.

[33] I concur with the majority in Part I of the opinion, and I believe this case is 

resolved in full by the decision that the implied warranty of merchantability for 

the Combine and Corn Head was effectively disclaimed. See slip op. at ¶ 19. 

Therefore, I would not address the merits of Parts II and III. 

[34] Independent of the fact I do not believe Part II is a live issue, if I were 

compelled to express my opinion, I would disagree with the majority’s 

conclusion that the Corn Head is not “other property.” See slip op. at ¶ 27. The 

Combine and Corn Head were purchased from the same place, but not at the 

same time. They were being used together when the Combine caught fire, but 
Court of Appeals of Indiana | Opinion 18A-PL-2368 | July 24, 2019 Page 25 of 25

they are independent implements: the Combine could be used with other 

headers; the Corn Head could be used with other combines. In other words, 

although neither implement could effectively be used alone to harvest corn, 

they did not have to be used exclusively with each other. For these reasons, if I 

were to consider the economic loss doctrine issue, I would hold the Corn Head 

is “other property” not subject to the economic loss doctrine. See Gunkel, 822 

N.E.2d at 155 (“[P]roperty acquired separately from the defective good or 

service is ‘other property,’ whether or not it is, or is intended to be, incorporated 

into the same physical object.”). 

[35] As for Part III, again, I would not address the issue, but I do not otherwise 

disagree with the majority’s analysis.