NUMBER 13-17-00349-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
INTERNATIONAL INSURANCE COMPANY OF HANNOVER SE AS SUBROGEE TO ASSOCIATION OF UNITED STATES POSTAL LESSORS, Appellant,
v.
WAL-MART STORES, INC., WAL-MART STORES TEXAS, L.P., AND WAL-MART ASSOCIATES, INC., Appellees.
On appeal from the 105th District Court of Nueces County, Texas.
MEMORANDUM OPINION
Before Justices Contreras, Longoria and Hinojosa Memorandum Opinion by Justice Hinojosa
Appellant International Insurance Company of Hannover SE as subrogee to Association of United States Postal Lessors (Hannover) appeals a summary judgment
dismissing its products liability claims against Wal-Mart Stores, Inc., Wal-Mart Stores
Texas, LP, and Wal-Mart Associates, Inc. (Wal-Mart). By one issue, Hannover argues
that the trial court erred in granting Wal-Mart’s no-evidence motion for summary judgment
because it presented more than a scintilla of evidence that: (1) Wal-Mart sold a defective
space heater; and (2) established an exception to Wal-Mart’s statutory protection as an
innocent seller. We affirm.
I. BACKGROUND
A fire caused damage to a United States Post Office located in Corpus Christi,
Texas. Hannover, the insurer for the property, paid $1,675,388.31 for damages to the
post office. After an investigation revealed that a malfunctioning space heater might
have started the fire, Hannover filed a subrogation suit against Wal-Mart, 1 alleging
causes of action for products liability and negligence.
Wal-Mart filed a no-evidence motion for summary judgment, asserting that there
was no evidence it sold the heater. In the alternative, Wal-Mart maintained that it was
shielded from liability as an innocent seller pursuant to Texas Civil Practices and
Remedies Code section 82.003. See TEX. CIV. PRAC. & REM. CODE ANN. § 82.003 (West,
Westlaw through 2017 1st C.S.). Wal-Mart also argued that there was no evidence that
the heater was the proximate cause of the fire.
Hannover filed a response supported by the following evidence: the affidavit of
its expert Dennis Rasco; the deposition of postal employee Thelma Medina who
1 Hannover also sued Aloha Housewares, Inc., Forta Electronics Co., Staples Inc., and Staples the Office Superstore, LLC. They are not parties to this appeal. 2 purchased the heater; a research report prepared by Diversified Product Inspections, LLC
(DPI); recall notices from the United States Consumer Product Safety Commission
(CPSC); a Texas Secretary of State website print-out pertaining to Aloha Housewares,
Inc. (Aloha); and the affidavit of Katy Ohlsson.
In his affidavit, Rasco, an electrical engineer, opined that the heater caused the
post office fire. Rasco examined the heater and discovered that a contact arm of the
electrical component was bent and distorted. He concluded that the design of the heater
presented an unreasonable danger due to “[t]he failure of the electrical component” and
“[t]he CPSC recall instructing consumers to immediately stop using the recalled heater[.]”
Rasco did not offer any opinion concerning the identity of the heater, instead referencing
the conclusions of the DPI report.
DPI prepared a report comparing the damaged heater to an exemplar, which was
branded as a “FlowPro” heater. DPI “determined that each heater was manufactured
and/or distributed by the same company.” DPI, however, was unable to determine the
damaged heater’s model number, serial number, or date of manufacture “[d]ue to the lack
of product markings[.]” DPI stated that there was a CPSC product recall for heaters “with
an identical or nearly identical design as [the damaged heater.]” The DPI report labels
Aloha as a “manufacturer and/or distributor.” Attached to the report was a CPSC product
recall notice for FlowPro heaters. The recall notice referenced an unidentified Chinese
manufacturer. Also attached to the report was a document identifying Aloha as the
registrant of the trademark FlowPro. Hannover attached additional CPSC recall notices
identifying Aloha as the “Importer/Distributor” of heaters manufactured by an unidentified
3 Chinese company and sold at Wal-Mart stores.
In her deposition testimony, Medina testified that she could not remember where
or when she purchased the heater. In her affidavit, Ohlsson detailed her efforts on behalf
of Hannover to access records from the United States Postal Service under the Freedom
of Information Act.
Following a hearing, the trial court granted Wal-Mart’s no-evidence motion for
summary judgment. This appeal followed.
II. DISCUSSION
By its sole issue, Hannover argues that “more than a scintilla of evidence exists
that Wal-Mart is liable[.]”
A. Standard of Review
After adequate time for discovery, a party without presenting summary judgment
evidence may move for summary judgment on the ground that there is no evidence of
one or more essential elements of a claim or defense on which an adverse party would
have the burden of proof at trial. TEX. R. CIV. P. 166a(i). A motion for no-evidence
summary judgment is equivalent to a motion for pretrial directed verdict, and we apply the
same legal sufficiency standard on review. Nalle Plastics Fam. Ltd. P’ship v. Porter,
Rogers, Dahlman & Gordon, P.C., 406 S.W.3d 186, 199 (Tex. App.—Corpus Christi 2013,
pet. denied). Such a motion should be granted if there is no evidence of at least one
essential element of the claimant’s cause of action. Hamilton v. Wilson, 249 S.W.3d 425,
426 (Tex. 2008).
All that is required of the non-movant is to produce a scintilla of probative evidence
4 to raise a genuine issue of material fact on the challenged element. Forbes Inc. v.
Granada Biosciences, Inc., 124 S.W.3d 167, 172 (Tex. 2003). Less than a scintilla of
evidence exists when the evidence is so weak as to do no more than create a mere
surmise or suspicion of a fact. Id. More than a scintilla of evidence exists if it would
allow reasonable and fair-minded people to differ in their conclusions. Id. In
determining whether the non-movant has produced more than a scintilla of evidence, we
review the evidence in the light most favorable to the non-movant, crediting such evidence
if reasonable jurors could and disregarding contrary evidence unless reasonable jurors
could not. Nalle Plastics, 406 S.W.3d at 199.
B. Applicable Law
Chapter 82 of the Texas Civil Practice and Remedies Code was added by the
legislature to protect sellers from products liability suits unless they significantly and
intentionally participated in the design or production of the product. Manchester Tank &
Equip. Co. v. Engineered Controls Int’l, Inc., 311 S.W.3d 573, 575 (Tex. App.—Waco
2009, pet. denied). The purpose of the statute is to protect innocent sellers by assigning
responsibility for the burden of products-liability litigation to product manufacturers.
Petrol. Sols., Inc. v.
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NUMBER 13-17-00349-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
INTERNATIONAL INSURANCE COMPANY OF HANNOVER SE AS SUBROGEE TO ASSOCIATION OF UNITED STATES POSTAL LESSORS, Appellant,
v.
WAL-MART STORES, INC., WAL-MART STORES TEXAS, L.P., AND WAL-MART ASSOCIATES, INC., Appellees.
On appeal from the 105th District Court of Nueces County, Texas.
MEMORANDUM OPINION
Before Justices Contreras, Longoria and Hinojosa Memorandum Opinion by Justice Hinojosa
Appellant International Insurance Company of Hannover SE as subrogee to Association of United States Postal Lessors (Hannover) appeals a summary judgment
dismissing its products liability claims against Wal-Mart Stores, Inc., Wal-Mart Stores
Texas, LP, and Wal-Mart Associates, Inc. (Wal-Mart). By one issue, Hannover argues
that the trial court erred in granting Wal-Mart’s no-evidence motion for summary judgment
because it presented more than a scintilla of evidence that: (1) Wal-Mart sold a defective
space heater; and (2) established an exception to Wal-Mart’s statutory protection as an
innocent seller. We affirm.
I. BACKGROUND
A fire caused damage to a United States Post Office located in Corpus Christi,
Texas. Hannover, the insurer for the property, paid $1,675,388.31 for damages to the
post office. After an investigation revealed that a malfunctioning space heater might
have started the fire, Hannover filed a subrogation suit against Wal-Mart, 1 alleging
causes of action for products liability and negligence.
Wal-Mart filed a no-evidence motion for summary judgment, asserting that there
was no evidence it sold the heater. In the alternative, Wal-Mart maintained that it was
shielded from liability as an innocent seller pursuant to Texas Civil Practices and
Remedies Code section 82.003. See TEX. CIV. PRAC. & REM. CODE ANN. § 82.003 (West,
Westlaw through 2017 1st C.S.). Wal-Mart also argued that there was no evidence that
the heater was the proximate cause of the fire.
Hannover filed a response supported by the following evidence: the affidavit of
its expert Dennis Rasco; the deposition of postal employee Thelma Medina who
1 Hannover also sued Aloha Housewares, Inc., Forta Electronics Co., Staples Inc., and Staples the Office Superstore, LLC. They are not parties to this appeal. 2 purchased the heater; a research report prepared by Diversified Product Inspections, LLC
(DPI); recall notices from the United States Consumer Product Safety Commission
(CPSC); a Texas Secretary of State website print-out pertaining to Aloha Housewares,
Inc. (Aloha); and the affidavit of Katy Ohlsson.
In his affidavit, Rasco, an electrical engineer, opined that the heater caused the
post office fire. Rasco examined the heater and discovered that a contact arm of the
electrical component was bent and distorted. He concluded that the design of the heater
presented an unreasonable danger due to “[t]he failure of the electrical component” and
“[t]he CPSC recall instructing consumers to immediately stop using the recalled heater[.]”
Rasco did not offer any opinion concerning the identity of the heater, instead referencing
the conclusions of the DPI report.
DPI prepared a report comparing the damaged heater to an exemplar, which was
branded as a “FlowPro” heater. DPI “determined that each heater was manufactured
and/or distributed by the same company.” DPI, however, was unable to determine the
damaged heater’s model number, serial number, or date of manufacture “[d]ue to the lack
of product markings[.]” DPI stated that there was a CPSC product recall for heaters “with
an identical or nearly identical design as [the damaged heater.]” The DPI report labels
Aloha as a “manufacturer and/or distributor.” Attached to the report was a CPSC product
recall notice for FlowPro heaters. The recall notice referenced an unidentified Chinese
manufacturer. Also attached to the report was a document identifying Aloha as the
registrant of the trademark FlowPro. Hannover attached additional CPSC recall notices
identifying Aloha as the “Importer/Distributor” of heaters manufactured by an unidentified
3 Chinese company and sold at Wal-Mart stores.
In her deposition testimony, Medina testified that she could not remember where
or when she purchased the heater. In her affidavit, Ohlsson detailed her efforts on behalf
of Hannover to access records from the United States Postal Service under the Freedom
of Information Act.
Following a hearing, the trial court granted Wal-Mart’s no-evidence motion for
summary judgment. This appeal followed.
II. DISCUSSION
By its sole issue, Hannover argues that “more than a scintilla of evidence exists
that Wal-Mart is liable[.]”
A. Standard of Review
After adequate time for discovery, a party without presenting summary judgment
evidence may move for summary judgment on the ground that there is no evidence of
one or more essential elements of a claim or defense on which an adverse party would
have the burden of proof at trial. TEX. R. CIV. P. 166a(i). A motion for no-evidence
summary judgment is equivalent to a motion for pretrial directed verdict, and we apply the
same legal sufficiency standard on review. Nalle Plastics Fam. Ltd. P’ship v. Porter,
Rogers, Dahlman & Gordon, P.C., 406 S.W.3d 186, 199 (Tex. App.—Corpus Christi 2013,
pet. denied). Such a motion should be granted if there is no evidence of at least one
essential element of the claimant’s cause of action. Hamilton v. Wilson, 249 S.W.3d 425,
426 (Tex. 2008).
All that is required of the non-movant is to produce a scintilla of probative evidence
4 to raise a genuine issue of material fact on the challenged element. Forbes Inc. v.
Granada Biosciences, Inc., 124 S.W.3d 167, 172 (Tex. 2003). Less than a scintilla of
evidence exists when the evidence is so weak as to do no more than create a mere
surmise or suspicion of a fact. Id. More than a scintilla of evidence exists if it would
allow reasonable and fair-minded people to differ in their conclusions. Id. In
determining whether the non-movant has produced more than a scintilla of evidence, we
review the evidence in the light most favorable to the non-movant, crediting such evidence
if reasonable jurors could and disregarding contrary evidence unless reasonable jurors
could not. Nalle Plastics, 406 S.W.3d at 199.
B. Applicable Law
Chapter 82 of the Texas Civil Practice and Remedies Code was added by the
legislature to protect sellers from products liability suits unless they significantly and
intentionally participated in the design or production of the product. Manchester Tank &
Equip. Co. v. Engineered Controls Int’l, Inc., 311 S.W.3d 573, 575 (Tex. App.—Waco
2009, pet. denied). The purpose of the statute is to protect innocent sellers by assigning
responsibility for the burden of products-liability litigation to product manufacturers.
Petrol. Sols., Inc. v. Head, 454 S.W.3d 482, 494 (Tex. 2014). Section 82.001(3) defines
“seller” as an entity that distributes or places a product into the stream of commerce for
commercial purposes. TEX. CIV. PRAC. & REM. CODE ANN. § 82.001(3) (West, Westlaw
through 2017 1st C.S.). A “manufacturer” is defined as “any person who is a designer,
formulator, constructor, rebuilder, fabricator, producer, compounder, processor, or
assembler of any product or any component part thereof and who places the product or
5 any component part thereof in the stream of commerce.” See id. § 82.001(4). A
products liability action includes:
any action against a manufacturer or seller for recovery of damages arising out of personal injury, death, or property damage allegedly caused by a defective product whether the action is based in strict tort liability, strict products liability, negligence, misrepresentation, breach of express or implied warranty, or any other theory or combination of theories.
Id. § 82.001(2).
Under chapter 82, a non-manufacturing seller is not liable for harm caused by a
product unless one of seven exceptions is established. Id. § 82.003(a). The only
exception relied on by Hannover in its summary judgment response states that “[a] seller
that did not manufacture a product is not liable for harm caused to the claimant by that
product unless the claimant proves . . . that the manufacturer of the product is . . .
insolvent.” Id. § 82.003(a)(7)(A). 2 A plaintiff bringing a products liability claim against a
non-manufacturing seller has the burden to establish an exception to the seller’s statutory
protection. See id. § 82.003(a); In re Atlas Tubular, LP, 296 S.W.3d 363, 365 (Tex.
App.—Corpus Christi 2009, orig. proceeding); see also Howard v. Wal-Mart, No. 10-09-
00246-CV, 2010 WL 3784918, at *3–4 (Tex. App.—Waco Sept. 29, 2010, no pet.) (mem.
op.) (holding that the trial court properly granted seller’s no-evidence summary judgment
motion where plaintiff presented no evidence regarding the application of a statutory
exception); Dennis v. Giles Grp., Inc., No. 04-07-00280-CV, 2008 WL 183062, at *6 (Tex.
App.—San Antonio Jan. 23, 2008, no pet.) (mem. op.) (reviewing whether plaintiff
2 Section 82.003 provides for six other exceptions to a seller’s statutory protection, which are not
relevant to this appeal. See TEX. CIV. PRAC. & REM. CODE ANN. § 82.003(a) (West, Westlaw through 2017 1st C.S.). 6 presented evidence of an exception to seller’s statutory protection in response to no-
evidence summary judgment motion).
C. Analysis
The parties do not dispute, and we agree, that Hannover’s claims constitute a
products liability action subject to chapter 82 the civil practice and remedies code. See
TEX. CIV. PRAC. & REM. CODE ANN. § 82.001(2). Therefore, to overcome Wal-Mart’s no-
evidence summary judgment motion, Hannover was required to present evidence that
Wal-Mart sold the allegedly defective heater and establish an exception to chapter 82’s
seller protection. See id. § 82.003(a); In re Atlas Tubular, LP, 296 S.W.3d at 365.
Assuming that there is more than a scintilla of evidence that Wal-Mart sold the heater, we
conclude that Hannover failed to present evidence that would obviate Wal-Mart’s status
as an innocent seller.
In its response to Wal-Mart’s no-evidence summary judgment motion, Hannover
presented evidence which it contended established that the manufacturer was insolvent.
See TEX. CIV. PRAC. & REM. CODE ANN. § 82.003(a)(7)(A). However, Hannover’s
summary judgment evidence identifies only the distributor of the heater. DPI concluded
in its report that the damaged heater was nearly identical to FlowPro heaters sold
exclusively at Wal-Mart. Hannover relies on the CPSC recall notices and trademark
registration attached to the DPI report to establish that Aloha, a Texas corporation, was
the owner of the FlowPro trademark. Hannover also relies on the forfeiture of Aloha’s
corporate charter as evidence that it is insolvent. This evidence fails to establish that
Aloha was also the manufacturer of the heater. To the contrary, the recall notices
7 establish only that Aloha imported and distributed the FlowPro heaters, which were
manufactured by an unidentified Chinese company. Hannover appears to confuse the
statutory definition of “seller,” which includes a distributor such as Aloha, and
“manufacturer,” which includes those entities that participate in the design, formulation,
construction, rebuilding, fabrication, compounding, processing, or assembling of a
product. See id. § 82.001(3)–(4); see also Gen. Motors Corp. v. Hudiburg Chevrolet,
Inc., 199 S.W.3d 249, 256 (Tex. 2006) (explaining that “all manufacturers are also sellers,
but not all sellers are manufacturers”). There is no evidence that Aloha engaged in any
manufacturing activity concerning the FlowPro heaters.
Because there is no evidence identifying the manufacturer of the heater or
indicating whether that manufacturer is insolvent, Hannover has failed to overcome Wal-
Mart’s statutory protection as an innocent seller. See TEX. CIV. PRAC. & REM. CODE ANN.
§ 82.003. We conclude that the trial court did not err in granting Wal-Mart’s no-evidence
summary judgment motion on this basis. We overrule Hannover’s sole issue.
III. CONCLUSION
We affirm the trial court’s judgment.
LETICIA HINOJOSA Justice Delivered and filed the 2nd day of August, 2018.