Herrod v. Metal Powder Products

413 F. App'x 7
CourtCourt of Appeals for the Tenth Circuit
DecidedDecember 23, 2010
Docket09-4175
StatusUnpublished
Cited by4 cases

This text of 413 F. App'x 7 (Herrod v. Metal Powder Products) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Herrod v. Metal Powder Products, 413 F. App'x 7 (10th Cir. 2010).

Opinion

ORDER AND JUDGMENT *

PER CURIAM.

In 2005, a wheel assembly separated from the trailer of a truck traveling on Interstate 15 in Davis County, Utah, bounced over the center cement divider, and crashed into a car driven by Kimball Herrod, who died as a result of his injuries. Mr. Herrod’s wife and children were passengers. Following the accident, the Utah Highway patrol found the wheel assembly with a Pro Torq spindle nut inside. Aplt.App. 870. The family filed suit alleging strict products liability and negligence against various defendants. The district court granted summary judgment in favor of Defendants-Appellees Metal Powder Products (“MPP”), Timpte, Inc., and Stem-co, L.P. This appeal followed. • Our jurisdiction in this diversity ease arises under 28 U.S.C. § 1291, and we affirm in part, reverse in part, and remand.

Background

The Pro Torq system is used in the trucking industry to secure wheel bearings. In most instances, wheel assemblies in the commercial trucking industry are secured by use of a double nut system. Aplt.App. 1173. By contrast, the ProTorq system consists of one nut and a keeper. Id. at 315. The share of ProTorq in the market for axle retention systems has consistently been less than one percent. Id. at 832.

To install the system, the nut is threaded onto the axle to hold the hub assembly and the trailer wheels in place, then the keeper is placed inside the nut to prevent *10 the nut from spinning and unthreading off the axle. Id. at 315. The keeper has teeth on its outer edge that interlock with corresponding teeth in a groove on the inside of the nut, which is the means by which the nut is locked in place. Id. The keeper also interlocks with the axle: the tab on the keeper is inserted into a groove cut into the top of the axle, called the keyway. Id. The alleged defect in this instance pertains to the mechanism by which the keeper interlocks with the groove on the nut. Aplt. Br. 21.

The semi-trailer involved in the subject accident was manufactured by Defendant .Timpte Industries. The trailer was manufactured with the Pro-Torq system at the request of the purchasing customer. Timpte Br. 4; Aplt.App. 1270. The precise date of the subject nut’s manufacture is unknown by the parties, but the part number is consistent with those manufactured by MPP prior to 1989. Aplt.App. 298. For the purpose of its summary judgment motion, MPP assumed it manufactured the subject parts. Id. at 869. Likewise, Timpte does not dispute that it sold the semi-trailer containing the subject parts. Timpte. Br. 5.

There are two main distribution channels for the Pro-Torq Nuts (PTNs): regional service centers/parts dealers and original equipment manufacturers (OEMs). Aplt.App. 835. Dealer training is an important component of marketing the ProTorq Spindle Nut. See id. at 834-35 (“[0]ne of the reasons for slower growth of sales for the PTNs is that not everyone in the heavy duty trucking industry feels comfortable with changing to a new product. The factories of OEMs may easily train their employees regarding the proper installation of the Pro-Torq Nuts but if the field service or dealers do not know how to re-install it, then it can cause problems .... The process of dealer training should be an on-going process. Although, dealer training is not the most important promotion activity for Pro-Torq Nut, it should not be ignored as it will help sell the product and avoid liability concerns in the long run.”).

A factual dispute remains regarding whether the keeper found by the Utah Highway Patrol following the accident was properly seated inside the nut. Defendants contend and rely upon evidence tending to show that the keeper was found properly seated inside the nut and, therefore, Plaintiffs’ product-defect claims should fail because foreseeable misinstallation, the alleged design defect, did not cause the accident. Id. at 870. Plaintiffs contend and also rely upon contrary evidence that the keeper was not installed correctly and that it likely snapped into place during the wheel separation. Aplt. Br. 9; see Aplt.App. 939-942, 983, 1057-59. In light of this dispute, for the purpose of deciding the legal questions posed on appeal we presume that misinstallation occurred. Plaintiffs maintain that the ProTorq system is unreasonably dangerous because it invites a particular type of misinstallation, namely, a failure to insert the keeper properly inside the groove, while believing it is inside the groove, due to its appearance. Aplt. Br. 21. MPP responds that, assuming it manufactured the subject product, the product was not unreasonably dangerous when sold, and thus not defective, because any potential danger to consumers arose not from the Pro-Torq design but from misinstallation that occurred after the production and sale of the product. MPP Br. 9.

Stemco purchased the Pro-Torq product line from MPP on November 19, 1996. Aplt.App. 100. Stemco agreed to pay a purchase price of $275,000 upon closing of the deal and agreed to make installment payments based on future sales up to a *11 total purchase price of $675,000. Id. at 130-31. In the Asset Purchase Agreement, MPP agreed to “remain liable for and to discharge fully and timely, all debts, expenses, liabilities, obligations, contracts, commitments and claims of any nature whatsoever of or against Seller or any of its Affiliates ... arising out of the ownership, operation or use of the Purchased Assets or the conduct of the Business prior to and on the date hereof.” Id. at 133.

Section 5.2 of the Purchase Agreement continues,

From and after the date of this Agreement and the consummation of the transactions contemplated hereby, Stem-co shall, upon the request of Seller, replace or repair any product generated by the Product Line which was sold by Seller prior to the date hereof and which Seller is obligated to replace or repair under the warranty to its customer. The cost of such replacement or repair, including all shipping, packaging and similar costs associated therewith, will be the obligation of the Seller, and Seller shall reimburse Stemco for any such costs within thirty (30) days of its receipt of any invoice in respect of such costs.

Id. at 136.

As part of the agreement to purchase the Pro-Torq line, MPP provided a list of known product failures that occurred during MPP’s seven-year ownership period. This list of Pro-Torq Product Warranty Incidents was included as Exhibit 6.6 to the Asset Purchase Agreement. Id. at 1003-07, 1038, 1225. The district court concluded that fourteen of twenty-nine listed incidents involved improper installation, three of which were clearly unrelated to the defect alleged here. Id. at 80-81. 1

Stemco also entered into a five-year Supply Agreement with MPP, pursuant to which Stemco agreed to purchase its requirements for the PTN exclusively from MPP and MPP agreed to sell exclusively to Stemco. Id. at 419, 421-22.

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Cite This Page — Counsel Stack

Bluebook (online)
413 F. App'x 7, Counsel Stack Legal Research, https://law.counselstack.com/opinion/herrod-v-metal-powder-products-ca10-2010.