Metaldyne Powertrain Components Inc. v. Sansera Engineering Limited

• Court: Court of Appeals for the Fourth Circuit
• Decided: December 29, 2025
• Docket: 25-1408
• Status: Unpublished

Opinion

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UNPUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 25-1408

METALDYNE POWERTRAIN COMPONENTS, INC.,

Plaintiff – Appellee,

v.

SANSERA ENGINEERING LTD.,

Defendant – Appellant.

Appeal from the United States District Court for the District of South Carolina, at Charleston. Bruce H. Hendricks, District Judge. (2:21-cv-03588-BHH)

Argued: October 21, 2025 Decided: December 29, 2025

Before HARRIS, HEYTENS, and BENJAMIN, Circuit Judges.

Vacated and remanded by unpublished opinion. Judge Heytens wrote the opinion, which Judge Harris and Judge Benjamin joined.

ARGUED: Herbert C. Donovan, BROOKS WILKINS SHARKEY & TURCO PLLC, Birmingham, Michigan, for Appellant. Kevin Alan Hall, WOMBLE BOND DICKINSON (US) LLP, Columbia, South Carolina, for Appellee. ON BRIEF: Robert E. Sumner, IV, BUTLER SNOW, LLP, Charleston, South Carolina; Jason D. Killips, BROOKS WILKINS SHARKEY & TURCO PLLC, Birmingham, Michigan, for Appellant. M. Todd Carroll, Ruth A. Levy, Columbia, South Carolina, M. Elizabeth O’Neill, WOMBLE BOND DICKINSON (US) LLP, Charlotte, North Carolina, for Appellee. USCA4 Appeal: 25-1408 Doc: 45 Filed: 12/29/2025 Pg: 2 of 8

Unpublished opinions are not binding precedent in this circuit.

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TOBY HEYTENS, Circuit Judge:

This appeal turns on whether a particular contractual provision governs a given set

of claims. Because the district court erred in concluding that provision applies here, we

vacate the judgment and remand for further proceedings.

I.

Plaintiff Metaldyne Powertrain Components, Inc. supplies transmission gearboxes

for BMW motorcycles. In 2016, Metaldyne bought a component of those gearboxes from

defendant Sansera Engineering Ltd. A few years later, BMW voluntarily recalled and

replaced the Sansera-supplied parts after reports of defects and reached a settlement with

Metaldyne to recoup the costs of doing so.

Metaldyne sued Sansera on six state-law theories, seeking indemnification “for the

costs and amounts it was obligated to pay BMW.” JA 22.1 The district court granted

summary judgment to Sansera on all six counts. Metaldyne appeals. As always, we review

a district court’s grant of summary judgment de novo, see, e.g., Hall v. Sheppard Pratt

Health Sys., 155 F.4th 747, 751 (4th Cir. 2025), including the court’s interpretation of state

law, see Salve Regina Coll. v. Russell, 499 U.S. 225, 231 (1991).

II.

The district court’s reasons for rejecting each of Metaldyne’s claims rest on a shared

foundation—that Section 9 of the underlying purchase order between Sansera and

1 Sansera also brought counterclaims against Metaldyne. The district court granted summary judgment to Metaldyne on those claims, and Sansera has not cross-appealed that portion of the court’s judgment.

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Metaldyne applies to this dispute. Building on that foundation, the district court concluded

that: (1) Metaldyne has no claim under Section 9 because it did not obtain Sansera’s “prior

written consent” before settling with BMW, JA 46; and (2) Section 9 provides the exclusive

mechanism for Metaldyne’s requested relief, so all Metaldyne’s claims fail as a matter of

law. Because we conclude the initial premise is faulty—i.e., that Section 9 does not apply

here—we vacate the district court’s judgment and remand for further proceedings without

reaching any other questions.

The parties agree South Carolina law governs their dispute, and we decide the case

based on that understanding. In South Carolina, “[t]he cardinal rule of contract

interpretation is to ascertain and give legal effect to the parties’ intentions as determined

by the contract language.” Whitlock v. Stewart Title Guar. Co., 732 S.E.2d 626, 628

(S.C. 2012) (quotation marks removed). In doing so, we must “examin[e] the entire

contract” rather than “portions” in “isolat[ion].” Williams v. GEICO, 762 S.E.2d 705, 710

(S.C. 2014). Applying those rules, we conclude Section 9 does not apply in this situation.

Section 9’s text is a poor fit for these facts. Its first sentence requires Sansera to

“indemnify and defend [Metaldyne] against third-party claims asserted against

[Metaldyne] or its customers for bodily injury, death, or property damage[.]” JA 45–46.

That language alone creates two problems for Sansera’s position.

First, Metaldyne is not seeking indemnification for amounts it paid “for bodily

injury, death, or property damage.” JA 45–46. Instead, Metaldyne asserts—without

contradiction from Sansera—that it seeks to recover money it paid to reimburse BMW for

the cost of recalling and replacing Sansera-supplied parts before those parts broke. And

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under South Carolina law, there is a “difference between a claim for the costs of repairing

or removing defective work, which is not a claim for property damage, and a claim for the

costs of repairing damage caused by the defective work, which is a claim for property

damage.” Crossmann Cmtys. of N.C., Inc. v. Harleysville Mut. Ins. Co., 717 S.E.2d 589,

593 (S.C. 2011) (quotation marks removed and emphasis added).

Second, under South Carolina law, BMW’s claims against Metaldyne were not

“third-party claims asserted against [Metaldyne] or its customers.” JA 45. Although the

district court was right that “BMW is a third-party to” the contract between Metaldyne and

Sansera (JA 309), BMW did not assert a “third-party claim[]” against Metaldyne within

the meaning of Section 9. Section 9 is captioned “Product Liability,” which tracks its use

of words like “design or manufacture of Products,” “defect[s],” and liability for “bodily

injury, death, or property damage.” JA 45–46. And, under South Carolina law, the

“[l]iability of [a] seller for [a] defective product” is based on “physical harm caused to the

ultimate user or consumer, or to his property,” S.C. Code § 15-73-10(1) (emphasis added),

not economic harm to downstream suppliers like BMW. So, here too, Section 9 does not

appear to cover the claims for which Metaldyne seeks indemnification.

Two more features of the Metaldyne–Sansera contract confirm our conclusion. For

one thing, Section 9’s final paragraph requires Sansera to “obtain product liability

insurance with worldwide validity and a minimum coverage in the amount of $20 million

per occurrence for personal injury and property damage or other amount agreed to in

writing by [Metaldyne].” JA 46. The obvious purpose of this provision is to ensure

Sansera’s ability to meet the indemnification obligations imposed by Section 9’s first

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sentence. But if Sansera’s view were right, that scheme would have a serious gap because—

as we have explained—it does not appear that a “product liability insurance policy” would

cover the sort of costs BMW sought from Metaldyne here.

Finally, a different provision of the Metaldyne–Sansera agreement—Section 14—

specifically distinguishes between the circumstances covered by Section 9 and those

present here. Section 14 specifies four types of “costs [] and losses” for which Sansera must

reimburse Metaldyne if any Sansera-supplied parts fail to comply with the warranties set

forth elsewhere in the contract. JA 52. One provision mirrors Section 9 by referencing

“claims for personal injury (including death) or property damage caused by such

nonconforming Products.” Id.; accord JA 45–46 (Section 9 covers “claims . . . for bodily

injury, death, or property damage . . . caused by [Sansera’s] design or manufacture of

Products or provision of Services”). In contrast, a different provision identifies costs and

expenses incurred in “conducting recall campaigns or other corrective service actions.”

JA 52. If “property damage” (a term used in both Section 9 and Section 14) already

included recall costs, there would have been no need to list “recall costs” separately in

Section 14.2

2 Sansera insists that Section 14’s recall language “is irrelevant here” because that section is limited to “costs, expenses and losses incurred by [Metaldyne]” rather than BMW. Sansera Br. 28–30; see JA 52. We need not and do not decide at this point whether Metaldyne has a valid claim under Section 14. For our purposes, it is enough to say that Section 14 confirms that the contract’s drafters knew how to distinguish claims for indemnification arising from property damage from those arising from recalls.

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Sansera’s contrary arguments fail to move the needle. It cites two district court

opinions for the proposition that “an ultimate manufacturer’s recall of a product resulting

from a supplier’s faulty inputs falls within the phrase ‘property damage.’” Sansera Br. 18.

Neither decision involved South Carolina law and neither is binding on us. What is more—

and unlike in this case—the “faulty inputs” (id.) in those cases irreparably damaged the

broader products, which fell within those contracts’ definitions of “property damage.” Penn

Nat’l Sec. Ins. Co. v. LinkOne SRC, LLC, 542 F. Supp. 3d 355, 363 (E.D.N.C. 2021)

(quoting definition); Thruway Produce, Inc. v. Massachusetts Bay Ins. Co., 114 F. Supp.

3d 81, 94 (W.D.N.Y. 2015) (same). In contrast, the contract at issue here does not define

property damage. And, as we explained earlier, the default rule in South Carolina is that

“the costs of repairing or removing defective work”—the situation we have here—“is not

a claim for property damage.” Crossmann Cmtys. of N.C., 717 S.E.2d at 593 (quotation

marks removed and emphasis added).

Sansera also points to “the breadth of the Metaldyne–BMW settlement agreement,”

contending that it “covers every conceivable claim BMW could have asserted against

Metaldyne arising from the defective gearboxes”—including any potential tort claims

brought by consumers against BMW. Sansera Br. 16. But the question before us involves

the nature of the claims for which Metaldyne is seeking recovery from Sansera rather than

the scope of the claims BMW gave up against Metaldyne. And, once again, Sansera has

not challenged Metaldyne’s assertions that the amount it seeks in this case is the exact

amount it paid to reimburse BMW for its recall costs.

* * *

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We need not and do not address whether another section of the contract governs

Metaldyne’s claims or whether some or all of Metaldyne’s claims fail for other reasons.

Instead, we hold only that the district court erred in concluding that Section 9 governs these

claims. The judgment is vacated, and the case is remanded for further proceedings

consistent with this opinion.

SO ORDERED