Insurance Co. of North America v. General Electric Co.

376 F. Supp. 638, 1974 U.S. Dist. LEXIS 8280
CourtDistrict Court, W.D. Virginia
DecidedMay 31, 1974
DocketCiv. A. 72-C-133-R
StatusPublished
Cited by5 cases

This text of 376 F. Supp. 638 (Insurance Co. of North America v. General Electric Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Insurance Co. of North America v. General Electric Co., 376 F. Supp. 638, 1974 U.S. Dist. LEXIS 8280 (W.D. Va. 1974).

Opinion

MEMORANDUM OF FINDINGS ON STATUTE OF LIMITATIONS ON MOTION TO RECONSIDER 1

DALTON, District Judge.

This is a diversity action filed pursuant to 28 U.S.C. § 1332 on October 12, 1972, by plaintiff Insurance Company of North America, a Pennsylvania corporation. Plaintiff, as assignee, seeks $62,677.27 plus interest from defendant *640 General Electric Company, a corporation incorporated under the laws of the State of New York, for damages on a fire loss suffered by plaintiff’s assignor, the Grand Lodge of the Benevolent and Protective Order of Elks of the United States of America, at the Elks National Home in Bedford, Virginia (hereinafter referred to as the Elks Home), on September 27, 1970. The facts of the case, as best can be determined by the court at this stage of the proceedings are as follows:

On or about September 27, 1970, plaintiff had in effect a policy of fire insurance covering real and personal property and other incidental benefits for the Elks National Home. During the year 1961, a Hotpoint Model HK-7 Deep Fryer, Serial No. H 4626-7, manufactured by the defendant, was sold to the Elks Home by a Virginia retailer for use in the Home in Bedford, Virginia. The electric deep fryer was placed in service and used in the kitchen at the Elks Home from 1961 until September 27, 1970, when a fire erupted in the fryer, resulting in extensive damage to the building in which the kitchen was located. During the period of time after the purchase of the fryer in 1961, until the fire, the Elks Home had no difficulties with the fryer and it remained continuously in service. After the sale of the fryer in 1961, the defendant had no further contact with the deep fryer in use at the Elks Home, i. e., the defendant supplied no replacement parts for the fryer and performed no servicing on the unit.

Pursuant to its policy with the Order of Elks, plaintiff paid for the damages to the Elks’ property caused by the fire, taking an assignment of rights as against third parties. In its status as assignee, plaintiff brings this action to recover from the defendant for the property damage to the Elks Home.

The complaint, which contains five counts, was filed in this court on October 12, 1972, more than ten years after the date of sale and more than two years after the date of the fire. The five counts of the complaint contain allegations of negligence, breach of implied warranty, and strict liability in tort. Counts I and V of the complaint allege negligence on the part of the defendant. Count I is grounded upon the defendant’s alleged negligence in the design, construction, manufacture, inspection, and testing of the deep fryer. Count V alleges negligence in the defendant’s failure to warn potential users of the alleged defective condition of the deep fryer. Count II of the complaint alleges a breach of the traditional implied warranty of merchantability, or fitness for ordinary purposes, as that warranty was generally characterized in Virginia prior to the effective date of the Uniform Commercial Code.

Counts III and IV both allege liability on the ground of strict liability in tort, as defendant notes, pursuant to the doctrine promulgated by § 402A of the Restatement (Second) of Torts. Count III alleges that the deep fryer was placed in the stream of commerce in a “defective condition,” and Count IV alleges that the fryer was placed in the stream of commerce with a “potentially inherent defect.”

Since the defendant has set up as a bar to this action the Virginia statute of limitations, and it is conceded that Virginia law applies, the determinative issue before the court at this juncture is at what point a right of action for property damage accrued to the Elks, and what statute of limitations is applicable. As this court had occasion to note recently in a ease very similar to this, the Virginia law on this point is far from clear. Eden Corporation v. Utica Mutual Insurance Company, 350 F.Supp. 637, 643 (W.D.Va.1972). The defendant has maintained strenuously that the applicable statutes begin to run as of the date the deep fryer was sold in 1961. Plaintiff, on the other hand, maintains that its assignor suffered no injury to its real property until the date of the fire on September 27, 1970, that there *641 was no cause of action for property damages until that time, and therefore the statutes do not begin to run until 1970. 2

The applicable periods of limitation for ex delicto actions for property damages are determined by § 8-24 of the Code of Virginia (1957 Rep.Vol.), which reads in pertinent part:

Every action for personal injuries shall be brought within two years next after the right to bring the same shall have accrued. Every personal action, for which no limitation is otherwise prescribed, shall be brought within five years next after the right to bring the same shall have accrued, if it be for a matter of such nature that in ease a party die it can be brought by or against his representative; and, if it be for a matter not of such nature, shall be brought within one year next after the right to bring the same shall have accrued.

Therefore, if the action is such as will survive the death of a party, the period of limitations is five years. If the action will not so survive, the period of limitations is one year. An action for direct damage to property survives; a claim for indirect damage to property does not. Cf. Carva Food Corporation v. Dawley, 202 Va. 543, 118 S.E.2d 664 (1961).

Virginia has a three-year period of limitations for breach of an implied warranty. Code of Virginia § 8-13 (1957 Rep.Vol.). Section 8.2-725 of the Code of Virginia (1965 Added Vol.) provides for a four-year period of limitations for breach of any contract of sale under the provisions of the Uniform Commercial Code, if the Code is applicable.

Counts I and II

Richmond Redevelopment & Housing Authority v. Laburnum Construction Corporation, 195 Va. 827, 80 S.E.2d 574 (1954) (hereinafter, Laburnum), the key Supreme Court of Virginia decision bearing upon the issues raised herein, warrants close scrutiny. In Laburnum, a defective pipe joint was installed some six feet underground. Over five years later, gas escaped from the pipeline through the faulty union and caused an explosion, damaging a dwelling unit. The plaintiff had no knowledge that the pipe was defective and it was undisputed, as in the case at hand as to the alleged defect in the deep fryer, that obtaining that knowledge would have been difficult, if nigh to impossible. The plaintiff sought to recover for damage to the building caused by the explosion in a three count declaration: Count 1 charged a breach of express warranties allegedly made after the work was completed; Count 2 charged a breach of an implied warranty of skill and workmanship (“quasi-tortious conduct directed at the property itself,” Laburnum, 80 S.E.

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Bluebook (online)
376 F. Supp. 638, 1974 U.S. Dist. LEXIS 8280, Counsel Stack Legal Research, https://law.counselstack.com/opinion/insurance-co-of-north-america-v-general-electric-co-vawd-1974.