Berkeley Pump Co. v. Reed-Joseph Land Co.

653 S.W.2d 128, 279 Ark. 384, 37 U.C.C. Rep. Serv. (West) 1107, 1983 Ark. LEXIS 1477
CourtSupreme Court of Arkansas
DecidedJuly 18, 1983
Docket82-197
StatusPublished
Cited by75 cases

This text of 653 S.W.2d 128 (Berkeley Pump Co. v. Reed-Joseph Land Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berkeley Pump Co. v. Reed-Joseph Land Co., 653 S.W.2d 128, 279 Ark. 384, 37 U.C.C. Rep. Serv. (West) 1107, 1983 Ark. LEXIS 1477 (Ark. 1983).

Opinions

Steele Hays, Justice.

This products liability case involves three irrigation pumps consisting of components manufactured by Berkeley Pump Company, appellant, and assembled and installed by Riceland Machine and Supply Corporation and S & W Well Drilling and Irrigation Corporation, appellees. The pumps were purchased in 1978 from Riceland by J. B. Joseph and Clark Reed, appellees, to supply irrigation to Reed-Joseph’s rice and soybean crops on lands along the Red River in Miller County. In addition to relying on the pumps for their own irrigation needs, Reed-Joseph contracted with Agri-Vestors Corporation, appellee, to supply water for Agri-Vestors’ rice crop.

A few years earlier, Reed-Joseph had purchased a pumping system from Riceland with components supplied by Berkeley consisting of three slant-mounted pumping units having a combined capacity of 30,000 gallons per minute. Wanting an increase in capacity, and relying on performance curves published by Berkeley, Reed-Joseph elected to purchase three new Berkeley impellers which were expected to produce 36,000 gallons per minute. The system, installed in April, 1978, performed inadequately, resulting in drought damage to the crops of Reed-Joseph and Agri-Vestors, and springing this litigation.

Riceland initiated this action by suing Reed-Joseph for the value of the pumps and equipment. Reed-Joseph counterclaimed for damages for its crop losses on counts of strict liability, breach of express and implied warranties, negligence and fraud. Riceland brought Berkeley in by third-party complaint seeking contribution and indemnity and tendering to Berkeley the defense of the Reed-Joseph claims. Agri-Vestors intervened seeking recovery for its losses.

The case was submitted to the jury on all theories and a verdict of $684,753.421 was awarded Reed-Joseph. Riceland was awarded judgment of $134,039.15 and indemnified against Berkeley as to any money recovered by Reed-Joseph and Agri-Vestors with responsibility for the total fault apportioned by the jury at 90% to Berkeley, 10% to Riceland. Riceland was granted full indemnification from Berkeley and awarded $134,039.15 as expenses incurred in defending the litigation. Reed-Joseph was also awarded $15,698.15 and prejudgment interest of $126,081.20. Riceland was given judgment against Reed-Joseph for $32,407.22 plus prejudgment interest of $5,833.30.

On appeal, Berkeley alleges numerous errors, some of which must be sustained. It is urged that there was no breach of warranty for a particular purpose as there was no evidence that any particular purpose was communicated to Berkeley; that it was error to submit the case to the jury on the issue of strict liability and on the issue of fraud; that the court should not have awarded Reed-Joseph $15,698.15 and prejudgment interest, nor should it have indemnified Riceland and allowed it to recover the costs of defense.

Riceland argues on cross-appeal that prejudgment interest should not have been awarded to Reed-Joseph and, in the event of reversal, that the jury should not have been instructed with respect to breach of an express warranty because any such warranties were negated by Reed-Joseph’s failure to comply with certain conditions of warranty; that there was no evidence that Riceland knew of any particular purpose intended for the pumps and the jury should not have been instructed on the issue of a breach of warranty of fitness for a particular purpose.

I

We first consider what we regard as the pivotal point, whether under the evidence it was appropriate to submit the issue of strict liability to the jury.

After the immunity of manufacturers to all but the original purchaser was destroyed by MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916) the progress of products liability was gradual but deliberate. Producers of food and beverages experienced the first exposure and other manufacturers followed. In 1960 the Supreme Court of New Jersey applied strict liability to the user of a defective automobile, though wholly on the basis of an implied warranty. See Henningsen v. Bloomfield Motor Company, 32 N.J. 358, 161 A.2d 69 (1960).

In 1965, decisions were reached in two significant cases: in February the New Jersey Supreme Court handed down Santor v. A. and M. Karagheusiam, Inc., 44 N.J. 52, 207 A. 2d 305 (1965), upholding a recovery of an economic loss by a consumer against the manufacturer of a defective rug, recognizing a cause of action in tort, independent of fault or warranty. Justice Francis described the cause as hybrid in character, “having its commencement in contract and its termination in tort.” A few months later the Supreme Court of California, through Chief Justice Traylor, rejected the reasoning of Santor, saying “only if someone had been injured because the rug was unsafe for use would there have been any basis for imposing strict liability in tort.” Seely v. White Motor Company, 63 Cal. 2d 9, 403 P.2d 145, 45 Cal. Rptr. 17 (1965). The opinion points out that the tentative draft of 402A, Restatement of Torts (Second) limits recovery in strict liability to physical harm to persons or property.

That same year 402A was formally adopted by the American Law Institute, providing that one who sells “any product in a defective condition unreasonably dangerous to the user or consumer or to his property” is strictly liable. With the approval of 402A, strict liability “swept the country,” JProsser, The Law of Torts, § 98 at p. 567-8 (4th Edition 1971)] and within a decade all but a few jurisdictions had embraced the concept (Berman v. Watergate West, Inc., 391 A.2d 1351 [D.C. 1978]).

In Arkansas the change from fault to strict liability was legislative rather than j udicial, with the adoption of Act 111 of 1973, which provides for strict liability by suppliers of a product “in a defective condition which rendered it unreasonably dangerous.” (Ark. Stat. Ann. § 85-2-318.2). While our act is “substantially verbatim” to 402A (See Woods, Products Liability: Is Comparative Fault Winning the Day1 36 Arkansas Law Review, No. 3, p. 360, at 364), Act 111 broadened the scope of strict liability in two important respects: by substituting “supplier” for “seller” and injury to “persons and property” for “users” or “consumers.” More recently, the legislature enacted the. “Arkansas Products Liability Act of 1979” (Act. No. 511) (Ark. Stat. Ann. §§ 34-2801 — 34-2807 [Repl. 1962]), which makes no substantive changes, but simply codifies certain precepts and evidentiary rules affecting strict liability. (Powell, Survey of Torts, 3 UALR Law Journal 316.)

With that báckground, we turn to Berkeley’s arguments. It contends that strict liability is not applicable: one, where the product, in spite of any defective condition, does not constitute an unreasonable danger to persons or property; or two, in the absence of injury to persons, such defect causes purely economic loss.

We addressed the issue of economic loss only recently in Blagg v. Fred Hunt Co., Inc., 272 Ark. 185, 612 S.W.2d 321 (1981), where by dictum we opted in favor of the reasoning of Justice Francis in the Santor case. We see no need to review that choice. The other phase of the argument, i.e. that the product must be unreasonably dangerous, was not raised in Blagg and accordingly was not decided.

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Bluebook (online)
653 S.W.2d 128, 279 Ark. 384, 37 U.C.C. Rep. Serv. (West) 1107, 1983 Ark. LEXIS 1477, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berkeley-pump-co-v-reed-joseph-land-co-ark-1983.