Opinion ID: 1599640
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Heading: Products LiabilityIowa Code Section 613.18.

Text: The term product liability relates to liability arising from injury or damage resulting from the use of a product. Product liability may involve causes of action stated in negligence, strict liability or breach of warranty. See generally 72 C.J.S. Products Liability §§ 2, 3 (Supp. 1975); 63 Am.Jur.2d Products Liability §§ 1, 5-7 (1984). Strict liability in tort was first recognized by this court in Hawkeye-Security Insurance v. Ford Motor Co., 174 N.W.2d 672, 684 (Iowa 1970). We adopted the principles of strict liability as found in Restatement (Second) of Torts section 402A. Id. Under these principles, a seller of a defective product may be held liable for harm to the ultimate user or to the user's property. Under comment (f) to section 402A, the term seller is defined as a person engaged in the business of selling products for use or consumption. The term seller included the manufacturer, wholesaler, dealer, distributor and retailer. Id. Strict liability was included in the definition of fault when, by statute, Iowa adopted comparative fault in 1984. 84 Iowa Acts, ch. 1293, § 1 (now codified at Iowa Code § 668.1). With the adoption of 86 Iowa Acts chapter 1211, section 32, now codified at Iowa Code section 613.18, a statutory limitation was imposed upon strict liability and implied warranty claims against nonmanufacturers. The section provides: 1. A person who is not the assembler, designer, or manufacturer, and who wholesales, retails, distributes, or otherwise sells a product is: a. Immune from any suit based upon strict liability in tort or breach of implied warranty of merchantability which arises solely from an alleged defect in the original design or manufacture of the product. b. Not liable for damages based upon strict liability in tort or breach of implied warranty of merchantability for the product upon proof that the manufacturer is subject to the jurisdiction of the courts of this state and has not been judicially declared insolvent. 2. A person who is a retailer of a product and who assembles a product, such assembly having no causal relationship to the injury from which the claim arises, is not liable for damages based upon strict liability in tort or breach of implied warranty of merchantability which arises from an alleged defect in the original design or manufacture of the product upon proof that the manufacturer is subject to the jurisdiction of the courts of this state and has not been judicially declared insolvent. In challenging the court's dismissal of the strict liability and implied warranty claims, Bingham argues that subsection 613.18(1)(a) does not give the seller a complete exemption from suit. Bingham asserts the general immunity is qualified or limited by the requirements of subsection 613.18(1)(b). He urges the intent of subsection 613.18(1) was to provide immunity to wholesalers, retailers, distributors and other sellers upon proof that the manufacturer was subject to the jurisdiction of Iowa courts and had not been declared judicially insolvent. We disagree with Bingham's construction of the statute. In interpreting Iowa Code section 613.18, we keep our familiar rules of statutory construction in mind. See, e.g., American Asbestos v. Eastern Iowa Community College, 463 N.W.2d 56, 58 (Iowa 1990). The statute is divided into two subsections. Subsection 613.18(1) pertains to wholesalers, retailers, distributors and other sellers who are not the manufacturer or designer of the product and who do not assemble the product. Subsection 613.18(2) pertains to retailers who do assemble the products they sell. Subsection 613.18(1) is itself divided into two paragraphs. Paragraph 613.18(1)(a) provides for immunity from suit when the potential claim arises solely from defects in the original design or manufacture of the product. Paragraph 613.18(1)(b) limits strict liability and implied warranty claims when the claims do not arise solely from an alleged defect in the original design or manufacture of the product. Examples of suits arising under paragraph 613.18(1)(b) include suits under strict liability for failure to warn about the dangers of a product. See, e.g., Cooley v. Quick Supply Co., 221 N.W.2d 763, 768-69 (Iowa 1974) (citing Restatement § 402A); LaCoste v. Ford Motor Co., 322 N.W.2d 898, 900 (Iowa App.1982); Prosser & Keeton on Torts § 99, at 695 (5th ed. 1984); 63 Am. Jur.2d Products Liability § 545 (1984). There is no dispute that Huschart, the distributor, sold, but did not assemble, the drill. Thus, subsection 613.18(2) is inapplicable. It is also clear that Bingham's claim is one that arises solely from an alleged defect in the original design or manufacture of the product. Thus, subsection 613.18(1)(a) is applicable and provides Huschart with a statutory immunity from suit. Subsection 613.18(1)(b) does not impose a limitation upon the immunity protection of subsection 613.18(1)(a); it provides alternate protection against strict liability and breach of implied warranty for suits against nonmanufacturers where the defect was not in the original design or manufacture. Subsection 613.18(1)(a) provides a person ... is immune from any suit based upon.... Subsections 613.18(1)(b) and (2) provide a person ... is not liable for damages based upon ... upon proof that.... Although the statute is not a model of clarity, we believe the immunity protection of 613.18(1) is not dependent upon proof that the manufacturer of the product is subject to the jurisdiction of the courts of this state and has not been declared judicially insolvent as required in subsections 613.18(1)(b) and (2). The district court was correct in granting Huschart's motion to dismiss Bingham's strict liability and implied warranty claims.