Myers v. A.O. Smith Harvestore Products, Inc.

757 P.2d 695, 114 Idaho 432, 6 U.C.C. Rep. Serv. 2d (West) 1467, 1988 Ida. App. LEXIS 45
CourtIdaho Court of Appeals
DecidedMay 31, 1988
Docket16599
StatusPublished
Cited by19 cases

This text of 757 P.2d 695 (Myers v. A.O. Smith Harvestore Products, Inc.) is published on Counsel Stack Legal Research, covering Idaho Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Myers v. A.O. Smith Harvestore Products, Inc., 757 P.2d 695, 114 Idaho 432, 6 U.C.C. Rep. Serv. 2d (West) 1467, 1988 Ida. App. LEXIS 45 (Idaho Ct. App. 1988).

Opinion

WALTERS, Chief Judge.

Dale and Ila Myers, operators of a dairy farm near New Plymouth, Idaho, purchased a feed storage and delivery system from Rocky Mountain Harvestore Products, Inc. (hereinafter Rocky Mountain). Alan Myers, their son, also fed his separately-owned cattle out of this unit. The system was designed and manufactured by A.O. Smith Harvestore Products, Inc., and A.O. Smith Corporation (collectively hereinafter A.O. Smith). Agristor Credit Corporation financed the purchase. 1 The Myers were dissatisfied with the system and sought help from Rocky Mountain. Eventually the Myers removed the system and brought this action against Rocky Mountain and A.O. Smith. The district court granted partial summary judgment to Rocky Mountain and A.O. Smith on the Myers’ claims sounding in tort. Following a trial, the jury returned a special verdict in the defendants’ favor. The court denied the Myers’ subsequent motion for a new trial.

The Myers contend the summary judgment was erroneous. They also challenge the court’s'decision to dismiss a variety of claims after presentation of the plaintiffs’ case. They assert that their new trial motion should have been granted because of alleged jury misconduct. Five jurors allegedly announced an initial position at the outset of their deliberations and then refused to participate further in the deliberations. We reverse and remand as to one dismissed claim, an alleged promise by Rocky Mountain to provide expert assistance to the Myers, but affirm in all other respects.

The feed storage and delivery system consisted of a silo and a power-operated unloading unit, located in the bottom of the silo, for removal of the silo’s contents. To preserve the nutritional value of the feed, the silo was designed to be oxygen-limiting. During an eighteen-month period after installation of the system, the Myers’ combined dairy herd apparently suffered from decreased milk production. The Myers assert that the silo failed to function as promised, that Rocky Mountain failed to acknowledge or to successfully cure any defects, and, as a result, the Myers suffered significant losses. They theorize that the silo was unable to accomodate significant temperature fluctuations and permitted excess air exchange. Thus, the hay stored in the silo deteriorated and milk production declined. The Myers grounded their action on nine overlapping theories: (1) strict liability arising from affirmative misrepresentation; (2) common law deceit by misrepresentation; (3) common law deceit by intentional concealment of known defects; (4) breach of the written contract; (5) breach of express warranties; (6) breach of an implied warranty of merchantability; (7) breach of an implied warranty of fitness for a particular purpose; (8) strict liability arising from the sale of an unreasonably *435 dangerous product; and (9) negligent design and manufacture of the product.

Prior to trial, the defendants moved for summary judgment. Concluding that only economic losses were being sought, the court dismissed the Myers’ negligence and strict liability claims. After the plaintiffs’ case had been presented to the jury, A.O. Smith moved to dismiss the breach of warranty claims, to dismiss all claims of Alan Myers, and to dismiss the fraud claims. Rocky Mountain requested that all claims against it be dismissed.

The court dismissed the claims which were based upon implied warranties and denied the motions with respect to express warranties. The court declined to dismiss the claim that A.O. Smith had misrepresented the oxygen-limiting nature of the system. However, concluding the evidence did not show that Rocky Mountain knowingly had made false statements, the court dismissed the fraud claim against Rocky Mountain. The other breach of contract claims were narrowed to the breach of a promise to properly install the system. The question whether Alan Myers stood in a relationship to the defendants which would permit recovery by Alan was retained for the jury. In sum, the only theories for recovery presented to the jury were those based on express warranties made by the defendants and the fraud claim against A.O. Smith. By special verdict, the jury found against the Myers on those claims.

On review, we have collated the issues raised by the Myers according to the various judicial acts challenged. We turn first to the district court’s grant of partial summary judgment.

I

The Myers contend that employees of Rocky Mountain and A.O. Smith committed a variety of tortious acts including negligently advising the Myers regarding the operation of the system and the feeding of the cattle, misrepresenting the product, negligently designing and manufacturing the product, and knowingly selling an unreasonably dangerous product. The court granted summary judgment' on these claims. The Myers contend that the court erred because these allegations presented questions of fact properly to be decided by a jury. For example, Dale Myers averred that employees of Rocky Mountain indicated that a dark color and strong odor were customary for feed stored in this type of silo and did not indicate reduced quality. The Myers offered evidence that these statements were erroneous.

The district judge concluded that the Myers were seeking to recover only economic losses arising from failure of the product to meet their expectation. Therefore, in the district court’s opinion, the Myers could not prevail as a matter of law on their tort theories grounded in negligence and strict liability. The Myers contend that recovery in tort would be proper because the product caused property losses, namely damage tp feed and to their cattle.

Summary judgment is appropriate where a party is entitled to judgment as a matter of law after all facts and favorable inferences are drawn in the favor of the opposing party. See I.R.C.P. 56(c). The law of negligence and strict liability imposes no liability on the manufacturer of a product for defects which cause purely economic losses. Tusch Enterprises v. Coffin, 113 Idaho 37, 740 P.2d 1022 (1987); Clark v. International Harvester Co., 99 Idaho 326, 581 P.2d 784 (1978). Nor does it impose a liability on the seller under such circumstances. See id. Cf. 2 RESTATEMENT OF TORTS § 402 A (1963). Thus, resolution of this issue turns upon a characterization of the Myers’ alleged loss.

On facts similar to those in the case before us, a federal district court in Minnesota concluded “as a matter of law that the alleged damage to the alfalfa feed and the Holstein cows is non-recoverable economic loss.” Agristor Leasing v. Guggisberg, 617 F.Supp. 902, 908 (D.Minn.1985). The court reasoned that “[t]he essence of [the Guggisberg] complaint is that the Harvestore [silo] failed to perform as expected, *436 and they se'ek to recover the resulting losses to their dairy farm____” Id. The court was not persuaded that physical damage to stored feed and dairy cattle resulting from feed deterioration was outside the sphere of economic loss. Citing Guggisberg,

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Bluebook (online)
757 P.2d 695, 114 Idaho 432, 6 U.C.C. Rep. Serv. 2d (West) 1467, 1988 Ida. App. LEXIS 45, Counsel Stack Legal Research, https://law.counselstack.com/opinion/myers-v-ao-smith-harvestore-products-inc-idahoctapp-1988.