Court: Court of Appeals for the Seventh Circuit; March 7, 1994; Federal Appellate Court
A personal injury lawsuit arose from a furnace explosion involving the plaintiffs, Ivan and Mary Avery, against Mapco Gas Products and Honeywell, which manufactured a valve linked to the incident. Honeywell sought summary judgment regarding product liability claims and Mapco's cross-claims for contribution and indemnity. The district court granted Honeywell's motion, leading to a settlement between the plaintiffs and Mapco, prompting an appeal by both parties against the summary judgment.
On May 18, 1988, the Averys detected a gas odor in their home and contacted Thermo Gas Company, a Mapco subsidiary, for assistance. Although a Thermo Gas employee delivered gas, he failed to check for leaks or reignite pilot lights. After the employee's departure, Mary Avery and her son investigated the odor in the basement, leading to an explosion when she turned on a flashlight. Both suffered severe burns, and the house was damaged.
The furnace utilized liquid petroleum (LP) gas, regulated by a Honeywell valve that had been recalled in 1980 due to safety concerns regarding potential gas flow failure when the pilot light was out. Honeywell executed the recall with Consumer Product Safety Commission oversight and coordinated with LP gas suppliers. Thermo Gas claimed to have sent recall notices to customers; however, the previous owners of the Averys' home did not recall receiving it, nor were repairs made.
The Averys alleged various claims against Honeywell, including negligence, strict liability, breach of warranties, negligent recall, and fraudulent reporting under federal law. They also claimed Mapco was negligent in its gas delivery and inspections. Mapco sought contribution from Honeywell as a joint tortfeasor. The district court ruled that the claims against Honeywell were barred by the Indiana Products Liability Act's ten-year statute of repose, as the furnace was installed no later than 1975, with no evidence of recent valve replacement.
The court determined that the negligent recall claim was time-barred, as it was based on Honeywell's alleged failure to warn consumers about a product defect. The Indiana Supreme Court has established that failure to warn claims merge with underlying product liability claims. Arguments against the statute of repose's constitutionality and claims of estoppel were rejected. The Averys were found to lack the necessary privity with Honeywell to pursue breach of warranty claims, and the federal Consumer Product Safety Act does not allow for private causes of action. Additionally, Mapco had no grounds for seeking contribution or indemnity from Honeywell, as Indiana law generally prohibits this unless a contractual provision exists. An exception applies only in principal-agent relationships when the agent is blameless, which was not supported by evidence in this case.
On appeal, three primary issues were addressed: (1) whether there was a material fact dispute sufficient to prevent the statute of repose from being applied, (2) whether Indiana recognizes an independent negligent recall claim surviving the statute of repose, and (3) whether Mapco has a valid claim for contribution or indemnity against Honeywell. The court reviewed these questions de novo.
According to the Indiana Products Liability Act, product liability actions based on negligence or strict liability must be initiated within two years of the cause of action accruing or within ten years of the product's delivery to the first user. The Averys filed their suit within the two-year period, but their claims would be barred if the Honeywell valve was the original one installed in their furnace, which dated back to 1969. The court concluded that the mere potential for the valve's replacement was not enough to overcome summary judgment, as no evidence indicated it was replaced within the ten-year period of repose.
Honeywell, as the party requesting summary judgment under the statute of repose, must first demonstrate that its valve was installed in the Averys’ furnace more than ten years prior to the explosion. If Honeywell meets this initial burden, the Averys must provide sufficient evidence to create a genuine factual dispute about the valve's installation date. The Averys bear the trial burden to show the statute of repose does not apply; failure to provide adequate proof would result in summary judgment for Honeywell.
The evidence indicates the Honeywell valve was manufactured in November 1968 and likely as old as the furnace, which was installed by 1975. Although the Averys suggested it was common for manufacturers to provide original equipment valves as replacements, they failed to present specific evidence showing the valve in their furnace was replaced, particularly within the ten years before the explosion. The Averys had lived in the home for a short time before the incident, with no work done on the furnace during their residency. Previous owners, the Alfreys, stated the furnace was not installed or replaced after 1975. Testimonies from plumbing companies affirmed no repairs or modifications to the furnace had occurred since 1975. The Alfreys also indicated that tenants occasionally arranged for repairs independently, further complicating any claims of valve replacement.
None of the tenants recalled any repairs or replacements of the furnace or valve during their tenancies, leading to speculation by the Averys that the valve involved in the explosion may have been replaced within the ten years preceding the incident. However, this speculation is insufficient to avoid summary judgment, as a factfinder would need supporting evidence to conclude the valve was installed within the period of repose. Honeywell has presented evidence showing the valve was not installed after 1975, aligning with the furnace's installation date, thus countering the Averys' claims. Honeywell is not obligated to disprove every possibility that might support the Averys' argument; mere speculation is inadequate without substantiated evidence.
Additionally, the Averys and Mapco raised claims regarding Honeywell's alleged negligent recall campaign, distinct from product liability claims. However, the court agreed with the district court that this negligent recall claim merges with the underlying product liability claims and is therefore barred by the statute of repose. The Indiana Supreme Court's ruling in Dague supports this position, stating that actions for damages related to a manufacturer’s failure to warn about latent defects are considered product liability claims, which are subject to a ten-year limit under Indiana law. The Averys attempted to differentiate their negligent recall claim by arguing it stems from Honeywell's independent duty to properly conduct a recall, but this approach does not circumvent the legislative intent expressed in Dague.
The negligent recall claim by the Averys is essentially a rephrased failure to warn claim. They compare their situation to that of a "good Samaritan," suggesting that once someone undertakes aid, they owe a duty of reasonable care. However, Honeywell’s actions did not directly cause harm to the Averys, as they did not improperly replace the valve nor intervene with the furnace; their injury stemmed solely from Honeywell's failure to warn about the valve's dangers. Honeywell had knowledge of prior explosions linked to the valve and even faced multiple lawsuits regarding this issue, yet it did not effectively communicate the risks to consumers or utilize its public relations resources to disseminate this critical information. While Mapco points out shortcomings in Honeywell's recall efforts, these do not constitute a separate claim since there’s no evidence that any issues beyond the failure to warn were the proximate cause of the Averys' injuries. Additionally, neither the Averys nor their tenants received any recall information. Thus, the negligent recall claim is barred by the Indiana Supreme Court’s ruling in Dague, as the core issue revolves around the failure to warn rather than any distinct negligent conduct related to the recall itself.
Mapco's cross-claim against Honeywell for contribution and indemnification is deemed legally unviable under Indiana law, which typically does not allow such claims between joint tortfeasors absent a contract. Although there is an exception for principal-agent relationships, any potential liability for which Mapco seeks contribution does not stem from the valve recall, as the Averys have only charged Honeywell with negligent recall, a claim that merges with underlying tort theories and is barred by the statute of repose. Mapco's liability is based solely on its alleged negligence related to gas delivery and odor complaints, not as Honeywell's agent. The district court affirmed summary judgment in favor of Honeywell, establishing that the Averys' product liability claims exceed the ten-year repose period. Evidence suggests the furnace was installed by 1975, and the court found no dispute regarding the installation timing, despite the Averys' claims of uncertainty. The Averys bear the burden of proving their claims are timely, particularly concerning the valve's coding, which Honeywell argues is within its exclusive knowledge.
The Averys possess no evidence indicating that information about valve coding was inaccessible during discovery, as their counsel admitted to receiving all requested materials from Honeywell. The significance of the valve coding does not present inherent difficulties in discovery, and absent evidence challenging Honeywell's representations, those representations are accepted as true for summary judgment. The Averys and Mapco argue that Indiana's statute of repose violates the Indiana constitution and the Equal Protection Clause of the Fourteenth Amendment, but these claims have been previously rejected by both the Indiana Supreme Court and the appellate court, with a noted lack of effort from the Averys and Mapco to address these precedents in their briefs. While it is recognized that the Indiana Supreme Court has ruled certain injuries from intrauterine devices and asbestos are exempt from the statute of repose, this exception is limited to cases involving latent diseases from prolonged exposure, distinguishing them from one-time injuries, thus alleviating equal protection concerns. Mapco's assertion that Honeywell's non-disclosure of valve defects constituted fraud under the Consumer Product Safety Act is unfounded, as no private right of action exists for such violations. Furthermore, the Averys claim Mapco was negligent due to prior knowledge of a defective valve in their furnace, but this claim pertains to Mapco as a gas supplier, not as Honeywell's agent in the recall campaign.
