Opinion ID: 895253
Heading Depth: 2
Heading Rank: 1

Heading: Is EIFS a Product Under Chapter 82?

Text: Section 82.002(a) applies to losses arising from a products-liability action, which Section 82.001(2) defines as any action against a manufacturer or seller for recovery of damages arising out of personal injury, death, or property damage allegedly caused by a defective product whether the action is based in strict tort liability, strict products liability, negligence, misrepresentation, breach of express or implied warranty, or any other theory or combination of theories. K-2 argues that EIFS was not a defective product for purposes of Chapter 82. K-2 claims the product was the finished EIFS wall of the home, if not the home, while Fresh Coat argues that Life Forms purchased EIFS components plus the services required for its installation, and that the synthetic stucco system is the product. K-2 does not dispute that EIFS is a product as it was sold by K-2; rather K-2 claims that, after the EIFS components were purchased by Fresh Coat, they were not resold as products. Under K-2's definition of product, products that become part of homes cannot be the subject of indemnity claims by homebuilders and their contractors if those homebuilders and contractors are sued by homeowners. Instead, K-2 claims that products placed into the stream of commerce are not products once they become integrated into a house, which is real property, even if they were products for all purposes beforehand. We agree with the court of appeals that Chapter 82 contains no such limitation. Chapter 82 itself does not define product, but it defines seller as a person who is engaged in the business of distributing or otherwise placing, for any commercial purpose, in the stream of commerce for use or consumption a product or any component part thereof. [3] From that definition, a product is something distributed or otherwise placed, for any commercial purpose, into the stream of commerce for use or consumption. We hold that the EIFS provided by Fresh Coat was a product as that word is used in the text of Chapter 82. K-2 does not dispute that it is a manufacturer under Chapter 82 and that it placed its EIFS  which it admits is a product  into the stream of commerce. As the court of appeals noted, The record establishes that the EIFS is a synthetic stucco system made of component parts manufactured by [K-2]. [4] Likewise, the EIFS was used by Life Forms in the construction of homes, in addition to whatever use it was put to by homeowners. At least as to Fresh Coat's transaction with Life Forms, the EIFS was used. Other definitions of product also comport with how products are described in Chapter 82. Black's Law Dictionary defines product as [s]omething that is distributed commercially for use or consumption and that is usu[ally] (1) tangible personal property, (2) the result of fabrication or processing, and (3) an item that has passed through a chain of commercial distribution before ultimate use or consumption. [5] The Third Restatement of Torts uses a similar definition for product: A product is tangible personal property distributed commercially for use or consumption. Other items, such as real property and electricity, are products when the context of their distribution and use is sufficiently analogous to the distribution and use of tangible personal property. ... [6] Each party argues that comment e to Section 19 of the Restatement supports that party's own definition of product. However, comment e merely addresses whether a person is a product seller, not whether something is a product. Even so, it is unclear from comment e whether things such as EIFS  products that may become attachments to real property for other legal purposes  would be considered products. [7] Chapter 82's definition of manufacturer is also instructive. Section 82.001(4) defines manufacturer as a person who is a designer, formulator, constructor, rebuilder, fabricator, producer, compounder, processor, or assembler of any product or any component part thereof and who places the product or any component part thereof in the stream of commerce. Under this definition, a manufacturer is anyone who builds, formulates, or assembles the product or any component part thereof. Thus, even if K-2 were correct that an EIFS wall is the relevant product, a manufacturer may be liable for defects in any component part thereof. This language suggests the word product should not be read narrowly to exclude EIFS. None of the sources discussed above, including Chapter 82, except from the definition of product those things that may become an integral part of a home. Moreover, the Legislature could have easily excluded such products from the definition of product, or from products liability actions as that term is defined in Chapter 82. The Legislature could have added a few words to carve out components of homes or components of homes that become fixtures by some definition. Yet there is nothing in the text that can be read to exclude EIFS from being the type of defective product that can give rise to a products-liability action. The courts of appeals appear not to have dealt with the specific question of whether a home component can be a product for purposes of Chapter 82, but they have applied Texas products-liability law to subcomponents of homes. [8] K-2 cites no statutory text that indicates a narrow definition of product elsewhere, so we decline to read the term product more narrowly than it appears from the language of Chapter 82. We accordingly hold that the EIFS is a product under Chapter 82.