Opinion ID: 2069647
Heading Depth: 1
Heading Rank: 7

Heading: implied warranty as separate, substantive theory

Text: The trial court originally denied defendant Budd's motion for summary judgment on the issues of implied warranty and strict liability. It instructed the jury with respect to defendant Budd on the theory of strict liability choosing, however, not to instruct on the issue of implied warranty. Zacher claims this is error, that the theories are substantively different and that, by failure to instruct on each of such theories, the trial court prevented the jury from considering separate theories. In Pearson v. Franklin Laboratories, Inc., 254 N.W.2d 133 (S.D.1977), we noted that once it was established that a product defect exists, there was little difference between the liability theories of breach of warranty and strict liability in tort, apart from the availability of the defenses of lack of notice, disclaimer, and perhaps lack of privity. Breach of warranty requires proof that a product did not conform to expectations; that the product was either nonmerchantable or unfit for an ordinary purpose. SDCL 57A-2-714(1), 57A-2-314(2)(c). Strict liability, on the other hand, requires that the product be defective and unreasonably dangerous. Restatement (Second) of Torts § 402A. As between strict liability under § 402A and warranty liability, the warranty predicate, fitness for ordinary purposes, appears to set a lower liability threshhold that is more beneficial to a plaintiff. It also appears easier for the jury to understand and apply. However, several courts have held that for the purpose of jury instructions, strict liability claims subsume the warranty claim and have upheld trial courts' refusals to give parallel instructions. In Foster v. Ford Motor Co., 621 F.2d 715 (5th Cir.1980), the Fifth Circuit Court of Appeals responded to plaintiffs claims that they were entitled to an instruction on breach of warranty as follows: We note the elements of proof for that theory and strict liability are substantially similar. Id. at 719. The court noted that the negative implication of the warranty requirementsthat goods be fit for the ordinary purposes for which such goods are used is that the goods not be unreasonably dangerous. Id. In noting that the jury should be instructed on a legal theory only if the evidence is sufficient to justify such an instruction, the decision pointed out that the proof was directed primarily to the issue of whether the product itself was unreasonably dangerous. Id. at 718-719. As in Foster, most of Zacher's evidence went to show that multi-piece wheel assemblies are unreasonably dangerous or defectively designed. In McKnelly v. Sperry Corp., 642 F.2d 1101 (8th Cir.1981), the court held that under the Iowa Products Liability Law the breach of warranty theory did not have to be submitted to the jury when strict liability and negligence are fully submitted. The Eighth Circuit Court noted: The Iowa Supreme Court takes the view that strict liability is ordinarily in lieu of a theory of implied warranty, and both theories should be submitted only in `exceptional situations.' This is because as a practical matter, the issues under implied warranty are adequately submitted under strict liability, particularly in a personal injury as opposed to an economic injury action. 642 F.2d at 1105. In view of our previous holding in Pearson, supra, the Eighth Circuit decision would appear to be applicable in South Dakota as well. Therefore, although separate implied warranty instructions are favored and may be required in certain cases, it was not reversible error for the court to refuse these instructions in this case. In addition, Zacher was not entitled to instructions on implied warranty or strict liability as against defendants Yellowstone and Dixon. Yellowstone was the owner and lessor of the property in the instant case and its drivers continued to operate the equipment under the lease with Dixon. Dixon was the lessee of the equipment. Both were users of the equipment. Neither Yellowstone nor Dixon were sellers, lessors, or manufacturers of the equipment as to Zacher, who was not a user of the equipment but a bailee for repair, (i.e., a bailee to fix the flat tire for hire). Therefore, neither Yellowstone nor Dixon subjected themselves to liability under theories of either strict liability or implied warranty. We have reviewed all of the other issues raised by the Zachers and find no error. However, in view of our decision, the taxation of costs against them is vacated. Accordingly, this case is reversed and remanded for a new trial in accordance with this opinion. WUEST, C.J., and FOSHEIM, J., concur. HENDERSON, J., concurs with a writing. MORGAN, J., concurs in part and dissents in part.