Hale v. Norcold Incorporated

CourtDistrict Court, D. Arizona
DecidedApril 20, 2020
Docket2:18-cv-03597
StatusUnknown

This text of Hale v. Norcold Incorporated (Hale v. Norcold Incorporated) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hale v. Norcold Incorporated, (D. Ariz. 2020).

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Suzanne Hale, et al., No. CV-18-03597-PHX-MTL

10 Plaintiffs, ORDER

11 v.

12 Norcold Incorporated, et al.,

13 Defendants. 14 15 This Order addresses the Defendants’ Motion for Partial Summary Judgment on the 16 issues of punitive damages and emotional distress damages. (Doc. 56.) A recreational 17 vehicle (“RV”) owned by Suzanne and Jerry Hale (collectively “Plaintiffs” or the “Hales”) 18 was destroyed by a fire. Plaintiffs contend that a defective Norcold Series 1200 refrigerator 19 installed in their RV is to blame. This refrigerator’s cooling system works through a process 20 of gas absorption. The cooling unit heats “a solution of ammonia, water and chromate, 21 which ultimately causes the ammonia to evaporate resulting in cooling in the refrigerator 22 box.” (Doc. 56 at 2.) Plaintiffs allege that, due to a design flaw and the propensity for 23 internal corrosion, both of which were previously known to Defendants, the cooling 24 system’s boiler tube leaked and ignited the fire.1 (Doc. 1-3 at ¶¶ 60, 61.) 25 I. SUMMARY JUDGMENT STANDARD 26 Summary judgment is appropriate if the evidence, viewed in the light most favorable 27 to the nonmoving party, demonstrates “that there is no genuine dispute as to any material 28 1 Additional factual detail is in the Order on the Motion to Dismiss. (Doc. 41.) 1 fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A 2 genuine issue of material fact exists if “the evidence is such that a reasonable jury could 3 return a verdict for the nonmoving party,” and material facts are those “that might affect 4 the outcome of the suit under the governing law . . . .” Anderson v. Liberty Lobby, Inc., 5 477 U.S. 242, 248 (1986). At the summary judgment stage, “[t]he evidence of the non- 6 movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 7 255 (internal citations omitted); see also Jesinger v. Nevada Fed. Credit Union, 24 F.3d 8 1127, 1131 (9th Cir. 1994) (court determines whether there is a genuine issue for trial but 9 does not weigh the evidence or determine the truth of matters asserted). 10 II. DISCUSSION 11 This case is here on diversity jurisdiction. The Court will analyze the arguments 12 raised in the Motion under Arizona substantive law. See Mason & Dixon Intermodal, Inc. 13 v. Lapmaster Int’l LLC, 632 F.3d 1056, 1060 (9th Cir. 2011) (“When a district court sits in 14 diversity, or hears state law claims based on supplemental jurisdiction, the court applies 15 state substantive law to the state law claims.”). 16 A. Punitive Damages 17 Plaintiffs seek a recovery of punitive damages. Defendants advance three arguments 18 supporting their motion for summary judgment on punitive damages. 19 1. Exemption from Punitive Damages Under A.R.S. § 12-689(A)(2). 20 In 2012, the Arizona Legislature enacted an exemption from punitive damages 21 liability where: 22 The product, activity or service complied with all statutes of this state or the United States or standards, rules, regulations, 23 orders or other actions of a government agency pursuant to statutory authority that are relevant and material to the event or 24 risk allegedly causing the harm and the product, activity or service complied at the time the product left the control of the 25 manufacturer or seller. 26 A.R.S. § 12-689(A)(2).2 27 Defendants contend that this statute exempts them from punitive damages liability 28 2 The statute establishes two other exemptions that are not at issue in this case. 1 because the Series 1200 refrigerator in the Hales’ RV complied with the standards for gas 2 absorption refrigerators codified by the United States Department of Housing and Urban 3 Development (“HUD”). These standards were developed by the American National 4 Standards Institute (“ANSI”) and adopted by reference in HUD regulations for 5 manufactured homes. Plaintiffs contest the application of § 12-689(A)(2). 6 It is the Court’s duty in interpreting statutes to give effect to the Arizona 7 Legislature’s intent. United States v. Hernandez-Quintania, 874 F.3d 1123, 1126 (9th Cir. 8 2017). The best indication of intent is the statutory text itself. Id. Section 12-689(A)(2) 9 establishes an exception to punitive damages liability for products that are designed and 10 manufactured according to government standards. In order to qualify for the exemption, 11 (1) the product must have been manufactured according to standards adopted by a 12 government agency, (2) the standards must be “relevant and material to” the product defect 13 that caused the harm; and (3) the product must have complied with the standards “at the 14 time the product left” the manufacturer’s control. A.R.S. § 12-689(A)(2). 15 Defendants explain that the Series 1200 refrigerator was designed and 16 manufactured according to standards adopted by HUD for gas absorption refrigerators. 24 17 C.F.R. §§ 3280.702 (defining “gas refrigerator”); 3280.703 (adopting by reference ANSI 18 standards for gas-fueled refrigerators); 3280.4 (stating that industry standards incorporated 19 by reference shall “have the same force and effect as this Standard (24 CFR part 3280) . . .” 20 except where inconsistent); 3280.4(j)(13) (recognizing adoption by reference of ANSI 21 standards for gas-fueled refrigerators). Defendants believe that, based on these standards, 22 they should benefit from exemption to punitive damages. 23 Plaintiffs argue that § 12-689(A)(2) does not apply because the HUD standards do 24 not govern gas absorption refrigerators installed in recreational vehicles. While that may 25 be true, the statute does not require that the agency that initially approved the standards 26 exercise continuing regulatory authority over the product as used in any given market. The 27 product need only be manufactured according to the adopted specifications. To hold 28 otherwise would create an anomaly. Defendants could be exempt from punitive damages 1 arising from a defective refrigerator installed in a manufactured home, but, at the same 2 time, exposed to this liability relating to the same defect from the same refrigerator installed 3 in a recreational vehicle. 4 Plaintiffs next oppose applying § 12-689(A)(2) because the specific design defect 5 alleged in this case—“the use of the Single Weld Design to attach the electric heater 6 pockets to the outside of the refrigerator cooling unit boiler tube”3—is not specified in any 7 of the HUD-adopted ANSI standards. The point made here is that the standards that do 8 exists are not “relevant and material to the event or risk allegedly causing the harm.” See 9 A.R.S. § 12-689(A)(2). 10 In response to this argument, Defendants identify the different regulatory standards 11 that govern the performance of the cooling unit.

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