Opinion ID: 1774192
Heading Depth: 1
Heading Rank: 4

Heading: The Other Property Test is Unsound

Text: The majority concludes that there may be no action in strict liability for an accident resulting from an unreasonably dangerous defect if the accident happens to the product itself. It says that the accident must produce the physical harm to other property. But the majority has not discussed the criteria stated in section 402A which historically and by precedent have made an action one in tort. The majority opinion adds a word to the existing rule and to section 402A by requiring that the physical harm be to other property. Section 402A does not contain that limitation. It says that strict liability applies when there is physical harm thereby caused to the ultimate user or consumer, or to his property .... The strongest support marshalled by the majority opinion is the conclusory statement by Dean Page Keeton: A distinction should be made between the type of dangerous condition that causes damage only to the product itself and the type that is dangerous to other property or persons. A hazardous product that has harmed something or someone can be labeled as part of the accident problem ; tort law seeks to protect against this type of harm through allocation of risk. In contrast, a damaging event that harms only the product should be treated as irrelevant to policy considerations directing liability placement in tort. Consequently, if a defect causes damage limited solely to the property, recovery should be available, if at all, on a contract-warranty theory. Keeton, Annual Survey of Texas Law, Torts, 32 Sw. L.J. 1, 5 (1978). Dean Keeton's opinion is worthy of respect, but it would merit even more if he had stated some reason for it. He concludes that a damaging event to the product itself is irrelevant to policy considerations that determine liability in tort. Why? In the case before us it is the same defect, the same unreasonableness, the same dangerousness, and the same accident that would have supported an action for damages for personal injuries and to other property. The elimination of those criteria as to the product itself is at best an arbitrary distinction, and I find no policy reason to justify it. Let us assume that Curry Spraying has purchased an executive Lear Jet at a cost of one million dollars from Mid Continent. Its pilot takes off in the jet from an airstrip where several other Curry Spraying planes are anchored near the runway. A mechanic is working on one of Curry Spraying's other planes on the ground. Shortly after takeoff the pilot is forced to return to the airstrip where, in an attempt to land, he crashes the plane onto and destroys the plane on which the mechanic is working. Both the pilot and the mechanic sustain crippling injuries. The Lear Jet is totally destroyed. Let us assume further, that the fact finder makes the same findings that we have in the case before us. What actions in tort do we have from that accident? The pilot has an action in strict liability for his injuries because he proved a defect that was unreasonably dangerous, and it caused him physical harm. McKisson v. Sales Affiliates, Inc., 416 S.W.2d 787 (Tex. 1967). The mechanic who was working on the ground also has a strict liability action for his injuries even though he is a third-person bystander. Rourke v. Garza, 530 S.W.2d 794 (Tex.1975); Darryl v. Ford Motor Co., 440 S.W.2d 630 (Tex.1969). Curry Spraying has a strict liability action for the damage to the plane that was anchored on the ground because the company suffered physical harm to its property. Franklin Serum Co. v. Hoover & Son, 418 S.W.2d 482 (Tex.1967). The majority agrees with this since it would be Curry Spraying's other property. Under settled Texas law each of those three actions may be asserted under 402A. They are tort actions. Restatement (Second) of Torts, § 402A, Comment m (1965). According to the majority, the supposed accident created three tort actions and one contract action. The damages for the Lear Jet that was totaled in the crash must be sought in a contract action, states the majority, because it was damage to the product itself. I confess that the law is not always consistent, but we are creating an anomalous inconsistency when neither precedent, simplicity of a rule, nor sound reasons justify it. I agree with Dean Keeton's statement: A hazardous product that has harmed something or someone can be labeled a part of the accident problem.... I also agree with Comment c under section 402A that public policy demands that the burden of accidental injuries caused by products intended for consumption be placed upon those who market them .... Restatement (Second) of Torts, § 402A, Comment, c, at 350 (1965). The same policy reasons for deterring conduct and imposing a burden of care upon the seller exist in the case of a dangerous defect that causes an accident and damages to persons, other property, or the product itself. In fact the manufacturer is already under the identical burden of care. I would not require a plaintiff who was injured in an automobile accident because of its unreasonably dangerous defect to establish a tort action to recover his personal injuries but a contract action to recover for the damages to his vehicle. Negligence tort law has long been to the contrary. I agree that economic loss is not the same thing as physical harm that is required by section 402A. A defect that is not unreasonably dangerous, does not result in an accident, or one that must only be repaired or replaced, is not a tort action. Seely v. White Motor Co., 63 Cal.2d 9, 45 Cal.Rptr. 17, 403 P.2d 145 (1965). That is not the case before us and those are not the trial court's findings in the instance of Curry Spraying's airplane crash that resulted in physical harm. Property damage is usually readily distinguishable from economic loss. For example, operation of a defective radiator causes property damage when it results in a fire which destroys the plaintiff's store and economic harm when it results in conditions so uncomfortable that it causes the loss of customer patronage.... If the damage is to the defective product itself, similar distinctions must be drawn. When the defect causes an accident involving some violence or collision with external objects, the resulting loss is treated as property damage. On the other hand, when the damage to the product results from deterioration, internal breakage, or other non-accidental causes, It is treated as economic loss. Note, Economic Loss in Products Liability Jurisprudence, 66 Colum.L.Rev. 917, 918 (1966). [2] The majority opinion is grounded upon two Georgia cases, one from Idaho, one from Nebraska, and a federal district court. The only one which supports the majority opinion is the federal district court case which was passing on a South Carolina statutory adoption of section 402A. It expressed no reason for its holding that strict liability did not apply to the product itself. Cooley v. Salopian Industries, Ltd., 383 F.Supp. 1114 (D.S.C.1974). The case of Long v. Jim Letts Oldsmobile, Inc., 135 Ga.App. 293, 217 S.E.2d 602 (1st Div. 1975), was a suit for diminution of market value by reason of an engine disorder. There was no accident involved, and there were no findings of an unreasonably dangerous defect. The case of Long Manufacturing, Inc. v. Grady Tractor Co., 140 Ga.App. 320, 231 S.E.2d 105 (3d Div. 1976), was a suit by a corporate plaintiff under the Georgia statute that permits strict liability actions only by individuals. Both of those Georgia cases need to be studied in terms of a more recent Georgia case. Mike Bajalia, Inc. v. Amos Construction Co., 142 Ga.App. 225, 235 S.E.2d 664 (1st Div. 1977), permitted recovery for an individual, not the other corporate plaintiff, for the collapse of a building, and rejected as orbiter dicta the statement in Grady Tractor that there may be no recovery for damages to the product itself. It then permitted recovery for physical harm produced by dangerously defective building components. [Ga.] Code Ann. § 105-106, supra, imposes a statutory duty on manufacturers of personal property, the breach of which gives rise to an action on a theory of strict liability. The strict liability action, being predicated upon the breach of a legal duty, is an action ex delicto. See Ford Motor Company v. Carter, 141 Ga. App. 371, 233 S.E.2d 444. Therefore, the reasoning of Long v. Jim Letts Oldsmobile, Inc., 135 Ga.App. 293, 294(2), 217 S.E.2d 602, supra, is not applicable to the strict liability issue. Also distinguishable is Chrysler Corporation v. Taylor, 141 Ga. App. 671(2), 234 S.E.2d 123, where this court, held that an injury within the context of Code Ann. § 105-106, supra, does not include damages stemming from loss of the benefits of one's bargain. Of interest here is the recent case of Long Manufacturing, etc., Inc. v. Grady Tractor Co., 140 Ga.App. 320, 322(4), 323, 231 S.E.2d 105, in which the opinion discusses the issue of whether or not the plaintiff might recover under a strict liability theory for the damage to a portable tobacco barn, damaged when being transported along a highway after crossing a railroad track. In Division 4 thereof we find the language, We do not believe recovery in strict liability in tort can be had solely for property damage to the allegedly defective property itself. But in that case the plaintiff, a corporation and not a natural person, was suing for negligence in the design and was not seeking judgment under the Georgia strict liability statute; nor could it do so. See Code Ann. § 105-106, supra. The language in Division 4 is therefore obiter dicta, and does not control this case in any manner. The court erred in granting the motion for summary judgment of defendant Butler on the strict liability issue as to plaintiff Mike Bajalia, individually. In the case sub judice, the plaintiff's strict liability action is not predicated solely upon his economic loss, but is also based upon the physical injuries to the building. 142 Ga. App. at 227-28, 235 S.E.2d at 666. The case of Salmon Rivers Sportsman Camps, Inc. v. Cessna Aircraft Co., 97 Idaho 348, 544 P.2d 306 (1975), was on facts similar to this present case, but it included no claim for recovery in tort or strict liability. It was pleaded only as an action for breach of implied warranty, and it reached a result on that kind of contract action contrary to our Nobility holding that privity of contract need not be proved. Finally, the Nebraska case of Hawkins Construction Co. v. Matthews Co., 190 Neb. 546, 209 N.W.2d 643 (1973), must be understood in terms of Nebraska's unique version of strict liability. Nebraska does not follow section 402A; it recognizes strict liability, as explained in Hawkins, only for an injury to a Human being rightfully using that product. 190 Neb. at 559, 209 N.W.2d at 652. [Emphasis in original.] Under Nebraska law, any damage to property, whether to the product itself or to other property, would be economic loss and non-recoverable under strict liability. This Nebraska rule is also contrary to Nobility Homes, supra, and settled Texas Law. Franklin Serum Co. v. Hoover & Son, 418 S.W.2d 482 (Tex.1967). If we are to be guided by decisions of other jurisdictions, we should consider Cloud v. Kit Manufacturing Co., 563 P.2d 248 (Alaska 1977). The Clouds sued in strict liability for damages to their mobile home after their home was destroyed by fire. They proved that a rug paid was highly flammable and was ignited by reason of its proximity to an electric heating unit. Relying upon Seely and section 402A, the court held, ... first, that the damage to the product ... was the result of a sudden calamitous occurrence, the fire. In holding that recovery could be had for damages to the product itself when there was such an accident, the court made this significant distinction between an earlier decision of its own. The court wrote: We have granted review in order to clarify our opinion in Morrow v. New Moon Homes, Inc., 548 P.2d 279 (Alaska 1976).       We note that the harm alleged in this case is much different from that alleged by the Morrows in New Moon. The Morrows' trailer was allegedly defectively manufactured, but the defects resulted in a deprivation of the value of the Morrows' bargain. Unlike the circumstances in the case at bar, the Morrows were plagued by a lemon, not an unsafe product. The Morrows' trailer was not suited for the purpose for which it was purchased, but the defects in it were not such that they resulted in sudden, violent or calamitous harm. Having been deprived of the intended use of their product, the harm in that case was properly classified as economic loss. 563 P.2d at 251. It will simplify this complex area of the law if we hold to the line already defined in section 402A and adopted in Nobility. I would hold that an action is one in tort, not contract, when it is established that there was an accident, caused by a defective product that is unreasonably dangerous to the user or to his property. The trial court's findings in this case establish all of those facts. That rule is consistent with section 402A, Nobility, and former Texas products liability decisions which have taken strict products liability out of the contract arena in the case of consumers, users, nonusers, nonconsumers, and bystanders whether the damage is to the person or to the consumer's or user's property. Crocker v. Winthrop Laboratories, Inc., 514 S.W.2d 429 (Tex.1974); Darryl v. Ford Motor Co., 440 S.W.2d 630 (Tex.1969). The next time a court is faced with the same facts that we had in Nobility, which rule will the court follow? Will it look to accident, defect, and dangerousness as in Nobility? Or, will it look to the other property rule of this case? For these reasons I respectfully dissent. JOHNSON, J., joins in this dissent.