Willowbrook Foods, Inc. v. Grinnell Corp.

147 S.W.3d 492, 2004 WL 1835800
CourtCourt of Appeals of Texas
DecidedSeptember 23, 2004
Docket04-03-00659-CV
StatusPublished
Cited by36 cases

This text of 147 S.W.3d 492 (Willowbrook Foods, Inc. v. Grinnell Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Willowbrook Foods, Inc. v. Grinnell Corp., 147 S.W.3d 492, 2004 WL 1835800 (Tex. Ct. App. 2004).

Opinion

OPINION

Opinion by

SANDEE BRYAN MARION, Justice.

This is an appeal from summary judgments rendered in favor of appellees, the defendants below. The underlying lawsuit was brought by the appellants, Willow-brook Foods, Inc.; Promised Land Foods, Inc.; and Sunday House Foods, Inc. (collectively, “plaintiffs”), for damages resulting from a fire that started in a turkey fryer at a turkey processing plant owned by Sunday House, Inc. 1 The trial court granted the motions and rendered take-nothing judgments in favor of the defendants. We reverse in part the trial court’s judgment in favor of Emerson Electric Company, and we affirm the trial court’s judgment in all other respects.

FACTUAL BACKGROUND

Plaintiff Sunday House Foods, Inc. (“Sunday House”) operates a turkey processing plant in Fredericksburg, Texas. Sunday House purchased a Foldenaur Model 75-100 Loaf Browner (a turkey fryer) from Peerless Metal Products Corporation (“Peerless”). The fryer included as a component a fire suppression system to smother oil fires that may occur in the unit. Peerless ordered two control panels from Panatrol Corporation, specifying that each panel include one “Chromalox Temperature Controller” and one “Chro-malox High Temperature Limit Switch.” Panatrol Corporation, in turn, ordered the controllers from Chromolax, which is a division of Emerson Electric Company. Sunday House paid Peerless a down-payment of one third of the purchase price and financed the balance of the purchase price through Farm Credit Leasing Corporation (“FCL”) pursuant to a “Lease Agreement.”

According to plaintiffs, in either August or September of 1999, a fire originated in a turkey fryer and spread, destroying the building and its contents. Plaintiffs sued, bringing claims for strict liability based on defective design, manufacture, and marketing; breach of warranty; negligence; and violations of the Texas Deceptive Trade Practices Act (“the DTP A”). Plaintiffs alleged the fryer and/or its component parts were manufactured, marketed, sold, leased, installed, and serviced by the following defendants: (1) Emerson Electric Company, individually and doing business *496 as Chromalox (“Emerson”); 2 (2) Grinnell Corporation, individually and doing business as Grinnell Fire Protection Systems Company; Range Guard Industries, Inc.; Badger Fire Protection, Inc.; Automatic Sprinkler Corporation of America; Automatic Sprinkler Corporation; Figgie International (collectively, the “Fire Suppression Defendants”); (3) Peerless Metal Products Corporation; Peerless Acquisition Corporation; Peerless Millwright Service; Foldenaur Equipment Corporation (collectively, the “Peerless Defendants”); and (4) FCL. All defendants, except the Peerless Defendants, moved for summary judgment. The trial court granted the motions, without stating its grounds. On appeal, plaintiffs challenge the summary judgments in favor of the various defendants.

FCL’S SUMMARY JUDGMENT

FCL moved for a traditional summary judgment on plaintiffs’ claims of negligence, breach of warranty, and 'DTPA violations. In its motion for traditional summary judgment, FCL contended it was not liable because it did not design, sell, or market the fryer. FCL also moved for both a no-evidence and a traditional summary judgment on plaintiffs’ strict liability claims. FCL’s no-evidence motion as to the defective design and marketing claims stated, without elaboration, that plaintiffs failed to produce evidence on each element of these strict liability claims. As to the defective manufacturing claim, FCL asserted plaintiffs failed to produce evidence that the turkey fryer deviated from the manufacturer’s specifications in a way that rendered it unreasonably dangerous or that a manufacturing defect was the producing cause of their damages.

Strict Liability Claims

Plaintiffs do not dispute that FCL did not manufacture, design, or market the fryer. Instead, plaintiffs contend FCL was a “lessor” of the equipment and therefore strictly liable.

A defendant is liable in a strict liability action based on proof that it placed the product into the stream of commerce and that the defective product was a producing cause of the plaintiffs damages. See Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608, 613 (Tex.1996). In Rourke v. Garza, 530 S.W.2d 794 (Tex.1975), the Texas Supreme Court extended the doctrine of strict liability to include persons engaged in the business of leasing products to third parties. The Court held, “Where one is engaged in the business of introducing products into the channels of commerce, he will be subject to strict liability for physical harm caused by such products if they are unreasonably dangerous to the user or consumer whether he sells or leases his products.” Id. at 800. Thus, as a result of Rourke, the doctrine of strict liability applies to persons engaged in the business of leasing the product in question. However, the plaintiff must show that the defendant placed the product in the stream of commerce. Armstrong Rubber Co. v. Urquidez, 570 S.W.2d 374, 375-76 (Tex.1978). 3

*497 Plaintiffs ordered the fryer from Peerless Metal Products Corporation and made a partial payment towards its purchase on or about February 11, 1997. Farm Credit Bank of Texas is the financial institution that provided the funds to plaintiffs for the purchase of the turkey fryer. Farm Credit Bank and FCL executed a Servicing Agreement and Lease Agreement (“the Servicing Agreement”), pursuant to which Farm Credit Bank agreed to provide 100% of the funds to plaintiffs for the purchase of the fryer. In the Servicing Agreement, Farm Credit Bank is named the lessor and FCL the “servicer.” The agreement states that Farm Credit Bank, as lessor, “intends to be the owner” of the equipment, but “desires to have Servicer service the Lease [between FCL and plaintiffs].” FCL, in turn, acted as Farm Credit Bank’s agent in executing a Lease Agreement with plaintiffs. Under this agreement, FCL is named as lessor and plaintiff, Sunday House, is named as lessee. Plaintiffs repaid Farm Credit Bank in the form of rent payments to FCL; the payments included an interest charge. FCL then remitted the rental payments to Farm Credit Bank. Under the terms of the Lease Agreement, FCL retained title to the fryer, but plaintiffs were responsible for maintaining insurance on the equipment, payment of taxes, and payment of all maintenance costs. FCL assigned all its rights, title, and interest under the Lease Agreement to Farm Credit Bank. FCL never took possession of the fryer, which instead was delivered directly to plaintiffs. The deal between plaintiffs and FCL closed after the fryer was installed.

No Texas court has directly addressed whether strict liability should be extended to entities that provide financing to equipment purchasers in the form of lease agreements such as that at issue here. However, two federal courts have considered a similar issue.

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Cite This Page — Counsel Stack

Bluebook (online)
147 S.W.3d 492, 2004 WL 1835800, Counsel Stack Legal Research, https://law.counselstack.com/opinion/willowbrook-foods-inc-v-grinnell-corp-texapp-2004.