Court Opinion

ID: 9665284
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:44:02.237605+00
Date Added: 2024-06-11T18:15:14.411994
License: Public Domain

YETKA, Justice
(dissenting).
In Superwood Corp. v. Siempelkamp Corp., 311 N.W.2d 159 (Minn.1981), this court held that Article 2 of the Uniform Commercial Code provides the exclusive remedy for economic losses arising from commercial transactions not involving personal injury or damage to other property. In Superwood, I dissented, believing that the U.C.C. was not meant to be the sole source of relief for commercial losses and that it was inadequate to protect buyers from negligent manufacturers. However, I am willing to accept the logic that a commercial buyer complaining of a defect in a good, such as a piece of machinery or a storage bin, should be relegated to the U.C.C. rules designed to regulate the sale of goods uniformly. What is not clear, however, is that the U.C.C. rules should apply to the appellant’s particular cause of action in this case; for the defect complained of here was not in a good sold, but in important design services that were neglected.
Valley Farmers hired Lindsay Brothers to install storage bins for grain on their premises. This contract was at the instigation of Lindsay, who assured Valley that they would design the storage bins and choose the necessary component parts. In fulfillment of their contract, Lindsay acquired various components for the storage bins, getting materials for the bins from one company and air blowers from another. The assembled storage bins were, however, deficient in design. At the bottom of the grain storage bins were fans that drew air through the grain so as to keep it dry and cool. If the weather were cold and damp, frozen moisture could cause the air vents at the top of the bins to freeze and stick. If, as happened here, the vents were to stick while interior fans were running, the vacuum that results would cause the walls of the bin to collapse.
One who is injured should be allowed to sue for failures of design when the design aspects of an installation are a significant part of the contract, as they were here. Valley paid over $100,000 of a $500,000 contract for labor services in this sale. The storage bins were not a routine combination of materials, but a coordinated system of separate machines. Apparently, it was Lindsay’s success in persuading Valley that they would design good storage bins that led to the contract. It seems inconsistent that, having bought Lindsay’s expertise, Valley is not allowed to sue on the basis of defects in this expertise. If Lindsay had offered to provide blueprints of a storage bin design and then subsequently and separately had provided the materials to construct the bins, Lindsay would clearly be liable for a defect in the initial design. Again, if Lindsay had contracted to outside architects for the design of the storage bin, then those architects could be held liable. It is anomalous to hold that any separate liability for negligent services evaporates when the contract, for services is inseparably merged with the supply of goods.
Analyzing commercial transactions on such a separated basis would not conflict with earlier precedent. In Superwood and its progeny, this court has held that economic losses from commercial transactions are covered by the U.C.C., but it has not barred future courts from defining commercial transaction so as to exclude service aspects. Similarly, in O’Laughlin v. Minnesota Natural Gas Company, 253 N.W.2d 826 (Minn.1977), this court held that U.C.C. warranties could cover defects in installation, but did not say that the *558U.C.C. must cover ancillary issues of service.
This is not the type of case where the U.C.C. was intended to apply. The sale involved was only partly a sale of goods. An important part of the transaction was the sale of design abilities, which failed. I would reverse the court of appeals and allow suit to be brought against the designers who happened also to be the installers, Lindsay Brothers.