Avemco v. Honeywell, et al.

2002 DNH 078

• Court: District Court, D. New Hampshire
• Decided: April 5, 2002
• Docket: CV-01-338-M
• Status: Published

Opinion

Avemco v. Honeywell, et a l . CV-01-338-M 04/05/02 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Avemco Insurance Company, Inc. and Montage Aviation, Inc., Plaintiffs

v. Civil No. 01-338-M Opinion No. 2002 DNH 078 Honeywell International, Inc., Defendant

O R D E R

Montage Aviation, Inc. ("Montage"), which owns an airplane,

and Avemco Insurance Company, Inc. ("Avemco"), which insures that

plane, have sued Honeywell International, Inc. ("Honeywell"),

manufacturer of the plane's avionics systems. Plaintiffs assert

two counts, one for breach of warranty and one for strict

liability. They seek to recover for damage to the plane

allegedly resulting from the failure of the autopilot system

supplied by Honeywell. Before the court is Honeywell's motion

for judgment on the pleadings on Count II, plaintiffs' strict

liability claim. Plaintiffs object. For the reasons given

below, Honeywell's motion for judgment on the pleadings is

denied. Honeywell's position rests on a line of cases starting with

East River Steamship Corp. v. Transamerica Delaval, Inc., 47 6

U.S. 858, 871 (1986), which stand for the proposition that a

purchaser of a product has no cause of action in strict liability

against the manufacturer of that product when the only damage

claimed is damage to the product itself.1 In Honeywell's view,

plaintiffs' claim for damage to the plane resulting from alleged

defects in the autopilot is analogous to the claim in East River

Steamship for damage to several turbines resulting from defects

in the manufacture or installation of certain components of the

damaged turbines. The court disagrees.

In both East River Steamship and Public Service of New

Hampshire, there were no allegations of damage to any products

other than those supplied by the defendants. In each case, the

plaintiff alleged that a defective component of a product

manufactured and/or installed by the defendant malfunctioned and

1 This court, in a diversity case, has adopted the rule of East River Steamship. See Public Serv. Co. of N.H. v. Westinqhouse Elec. Corp., 685 F. Supp. 1281, 1286-87 (D.N.H. 1988) ("In light of the above-discussed cases, this Court is of the view that the New Hampshire Supreme Court would, if faced with the issue, deny tort liability for purely economic loss.") (citations omitted).

2 damaged other components of that same product, but damaged

nothing else. Under such circumstances, the manufacturer has no

liability in tort. But the consumer is not left without a

remedy; contract law is the vehicle by which a consumer may

recover for losses occasioned by a malfunction of a component in

a multi-component product that damages only the product itself.

Here, however, plaintiffs allege damage to property other

than the product supplied by Honeywell. If plaintiffs claimed

that one component of the Honeywell autopilot had malfunctioned

and damaged other parts of the autopilot, then this case would be

analogous to the cases upon which Honeywell relies. And East

River Steamship would have been resolved differently if, as in

this case, plaintiffs had sought to recover for damage to the

ship, say its hull, occasioned by the turbine's malfunction.

Plaintiffs in this case allege that defects in the autopilot

caused damage beyond loss of the avionics product manufactured

and supplied by Honeywell, i.e., the airframe of their plane.

Thus, East River Steamship and Public Service of New Hampshire

are inapposite. In other words, because Honeywell has no

contractual obligation to Montage vis a vis the airframe.

3 plaintiffs here have no remedy in contract against Honeywell for

damage to the airframe. Therefore, denying plaintiffs a remedy

in tort would not serve to protect contract law from drowning in

a sea of tort. East River Steamship, 476 U.S. at 866 (citing G.

G i l m o r e , T he D e a t h o f C o n t r a c t (1974)), but rather, would allow

Honeywell to escape liability for damage allegedly caused by its

malfunctioning product to a product it did not manufacture, the

aircraft. Accordingly, the rule of East River Steamship does not

entitle Honeywell to dismissal of plaintiffs' strict liability

claim, at least not on the pleadings.

For the reasons given, Honeywell's motion for judgment on

the pleadings (document no. 10) is denied.

SO ORDERED.

Steven J. McAuliffe United States District Judge

April 5, 2002

cc: Garry R. Lane, Esq. Jack P. Crisp, Jr., Esq. Robert E. Murphy, Jr., Esq. Michael G. McQuillen, Esq.