Sears, Roebuck and Co. v. Tyco Fire Products, LP et al
Filing
134
MEMORANDUM Opinion and Order Signed by the Honorable Ronald A. Guzman on 6/23/2011. Mailed notice (cjg, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
SEARS, ROEBUCK AND CO. and
KMART CORPORATION,
Plaintiffs,
v.
TYCO FIRE PRODUCTS LP,
SIMPLEXGRINNELL LP and STAR
SPRINKLER, INC.
Defendants.
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08 C 2838
Judge Ronald A. Guzmán
MEMORANDUM OPINION AND ORDER
Plaintiffs Sears, Roebuck and Company and Kmart Corporation (collectively
referred to herein as “Sears”) filed suit against Tyco Fire Products LP and
SimplexGrinnell LP for negligence and strict product liability and SimplexGrinnell LP
for breach of contract.1 Defendants have moved for summary judgment. For the reasons
provided in this Memorandum and Opinion, the Court grants in part and denies in part
the motion.
Facts
This litigation arises out of the inadvertent activation of Model F950 fire sprinkler
heads in Sears’ stores throughout the country. (Defs.’ LR 56.1(a)(3) Stmt. ¶ 9.)
Specifically, from May 15, 2007 to October 11, 2008, seven F950 sprinkler heads
activated in the absence of fire at Sears’ stores in Louisiana, Pennsylvania, Texas,
1
The complaint is dismissed as to defendants Star Sprinkler, Inc. and Mealane Corporation because
plaintiffs failed to serve these defendants within 120 days of filing their complaint as required by Federal
Rules of Civil Procedure 4(m).
California, Virginia and New Hampshire. (Id. ¶¶ 11-12.) The sprinkler heads were
manufactured by Grinnell Corporation and/or its successor Tyco Fire Products LP
(“Tyco”). (Id. ¶ 8.) SimplexGrinnell, also owned by Tyco, installs and services sprinkler
heads. (Pls.’ LR 56(b)(3) Stmt. ¶ 34; Defs.’ Ex. Q, Thomas McDonald Aff. 2-3.)
A.
Sprinkler Heads
Plaintiffs’ product claims are focused on the activation mechanism of the F950
sprinkler head. (Defs.’ LR 56.1(a)(3) Stmt. ¶ 26.) The activation mechanism is made up
of a dome-shaped heat collector which is soldered to a cup-shaped key. (Id. ¶¶ 19-20.)
The soldered junction is coated with wax and a hook is riveted to the key. (Id. ¶ 20.) At
the other end of the hook is a strut that runs the length of the sprinkler frame from the
deflector to the base. (Id.) At the base end of the frame, the strut presses against a plug
that holds back the water present in the sprinkler pipe. (Id.) When the solder melts or is
otherwise broken, for example from voids in the solder, the heat collector separates from
the key or cup which moves the hook, which in turn moves the strut, which frees the plug
and thereby allows water to flow from the sprinkler pipe. (Id.)
Only two activation mechanisms were recovered from the seven activations at
issue, one from a Sears’ store in Texas and one from a Sears’ store in Pennsylvania. (Id.
¶ 26.) Plaintiffs retained two experts, Gerald Uhland and Curt M. Freedman, to evaluate,
among other things, the two recovered activation mechanisms. (Id. ¶ 27.) The experts
testified that, because of deficiencies in the manufacturing process, the soldered junction
(described above) between the heat collector and the key had voids and/or areas of
2
deficient bonding between the heat collector and the key, which caused the inadvertent
activation of the sprinkler heads. (Pls.’ LR 56(b)(3) Stmt. ¶¶ 6, 9.)2 Specifically,
Freedman’s analysis included review of other F950 sprinkler heads that had prematurely
activated, as well as examination of the fire protections systems, building features and
surrounding circumstances of the premature sprinkler activations at the seven stores at
issue in this litigation. (Id. ¶ 5.) Based on his analysis, Freedman testified that the F950
sprinklers “were defective due to deficiencies in the manufacturing process and/or
deficiencies in quality control.” (Id. ¶ 6.) He further testified that there is no data to
support that the sprinkler heads activated from overheating, and that all other “causes of
failure . . . have been ruled out through investigation.” (Id. ¶ 7.)3
Uhland examined the recovered activation mechanisms, which he stated were
manufactured between 1978 and 1982. (Id. ¶ 9.) Based upon his analysis of the
mechanisms and discussions with Freedman, he opined that the mechanisms were
defective due to improper soldering at the time of manufacture. (Id.) Uhland testified
that a void space of one to five percent in the soldering was “usual” or “ordinary,” and
that based on his experience, he had observed premature activations with a void space of
twenty to fifty percent. (Id. ¶ 10.) Freedman had found a fifteen percent void space for
the sprinkler head examined from the Pennsylvania store. (Id. ¶ 4.) Uhland testified that
Freedman’s void numbers were conservative, and that he had understated the amount of
void space for the two activation mechanisms at issue here, but his methodology and
report were otherwise accurate. (Id. ¶ 11.)
2
Although defendant disputes this fact, the dispute is unsupported by evidence in the record as required by
Local Rule 56.1(b)(3)(B).
3
See n.2.
3
B.
Contracts
On January 1, 2003, Sears and SimplexGrinnell, LP (“SimplexGrinnell”) entered into
two contracts, a National Fire Protection Service Agreement (“Protection Agreement”)
and a National Sprinkler Identification Service Agreement (“Identification Agreement”).
(Defs.’ LR 56(a)(3) Stmt. ¶ 39.) Both Agreements will be discussed in more detail when
the Court address plaintiffs’ contract claims.
Discussion
Summary judgment is appropriate if there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The
movant bears the burden of showing the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). If the movant meets this burden,
the non-movant cannot rest on conclusory pleadings but “must present sufficient
evidence to show the existence of each element of its case on which it will bear the
burden at trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 58586 (1986). To succeed on a summary judgment motion, the evidence must be such “that
[no] reasonable jury could return a verdict for the nonmoving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In considering the motion, the court must
view all evidence in the light most favorable to the non-movant. Id. at 255.
In their five count complaint, Plaintiffs allege that SimplexGrinnell is liable for
breach of the Protection and Identification Agreements (Counts I & II) and for
negligently performing its duties under both Agreements (Count III). They further allege
4
that SimplexGrinnell and Tyco are liable under product liability theories of negligence
(Count IV) and strict liability (Count V) for designing, manufacturing, testing, inspecting
and distributing the allegedly defective sprinkler heads. Part I of this Opinion will
address plaintiffs’ tort based claims, while Part II will address plaintiffs’ contract claims
against SimplexGrinnell.
I.
Plaintiffs’ Tort Claims
A.
Statutes of Repose
Defendants first argue that the statutes of repose in Virginia, New Hampshire and
Texas bar plaintiffs’ tort claims involving the stores in those states. (Defs.’ Mem. Supp.
Summ. J. 4-7.)4 Defendants have the burden of establishing this affirmative defense.
Baker v. Poolservice Co., 636 S.E.2d 360, 366 (Va. 2006) (explaining that the statute of
repose is an affirmative defense and therefore, the movant’s burden to prove); Nexen,
Inc. v. Gulf Interstate Eng’g Co., 224 S.W.3d 412, 416 (Tex. App. Ct. 2006) (same); see
Beane v. Dana S. Beane & Co., 7 A.3d 1284, 1289 (N.H. 2010) (holding that defendant
bears the burden of proving affirmative defenses).
Defendants have failed to establish that the Virginia statute of repose bars
plaintiffs’ claims. The Virginia statute of repose provides that:
No action to recover for any injury to property . . . arising out of the
defective and unsafe condition of an improvement to real property . . .
shall be brought against any person performing or furnishing the . . .
4
Magistrate Judge Cox has already addressed the choice-of-law issues in this case and has held that the
substantive law of the state in which the store at issue is located applies to plaintiffs’ claims against
defendants except the claims against SimplexGrinnell that are based on its contractual agreement with
Sears. Sears, Roebuck & Co. v. Tyco Fire Prods. LP, No. 08 CV 2838, 2010 WL 3274278, at *2 (N.D. Ill.
Aug. 17, 2010).
5
construction of such improvement to real property more than five years
after the performance . . . [of] such services and construction.
Va. Code. Ann. § 8.01-250. The statute does not apply to “manufacturer[s] [and]
supplier[s] of . . . [the equipment at issue].” Id. The sprinkler heads are “equipment”
under the statute of repose. Royal Indem. Co. v. Tyco Fire Prods., LP, 704 S.E.2d 91, 94
(Va. 2011).
The statute of repose does not bar plaintiffs’ claims against Tyco because it
manufactured the product at issue. § 8.01-250; (Pls.’ LR 56(b)(3) Stmt. ¶ 34.) It is
unclear, however, whether it applies to the claims against SimplexGrinnell. It is
undisputed the SimplexGrinnell did not manufacturer the sprinkler heads, (Defs.’ LR
56(b)(3)(B) Stmt. ¶ 22; Pls.’ LR 56(b)(3) Stmt. ¶ 34; Defs.’ Ex. Q, Thomas McDonald
Aff. 2-3), but the record does not establish whether SimplexGrinnell supplied them to
Sears. Even assuming the statute did apply to SimplexGrinnell, however, defendants
have not established the date the sprinkler heads were installed and therefore, have not
proven when the construction (or installation) was performed as required under the
statute. Therefore, summary judgment is denied as to this issue.
Defendants have also failed to satisfy their burden with regards to the New
Hampshire statute of repose, which provides that claims arising out of improvements to
property must be brought within eight years of substantial completion of such
improvement. N.H. Rev. Stat. Ann. § 508:4-b.5 Defendants argue that the statute bars
5
Plaintiffs argue that the statute of repose for product liability claims, not improvements to real property,
applies here and, as such, defendants have no valid argument because the statute of repose for product
liability claims has been held to be unconstitutional. Heath v. Sears, Roebuck & Co., 464 A.2d 288, 295
(N.H. 1983). It is not clear whether the installation of sprinkler heads is an “improvement to real property,”
such that the statue of repose for such improvements applies in this case. However, the Court need not
decide this issue because even if it did apply, defendants have not established that they installed the
6
plaintiffs’ claims because Sears purchased the New Hampshire store in 1977. (Defs.’ LR
56(b)(3) Stmt. ¶ 24.) This date alone, however, does not establish when the fire
sprinklers were installed as required for the statute to apply. § 508:4-b. Therefore,
defendants have failed to establish this affirmative defense.
The situation is different for the claims involving the Texas stores. The Texas
statute of repose provides that “a claimant must commence a product liability action
against a manufacturer or seller” within fifteen years “after the date of the sale of the
product” by the manufacturer or seller, unless the “manufacturer or seller expressly
warrants in writing” that the product has a safe “useful life longer than fifteen years,” and
then, in that case, the claimant must bring suit within the warranted time period. Tex.
Civ. Prac. & Rem. Code Ann. § 16.012; see Zaragosa v. Chemetron Invs., Inc., 122
S.W.3d 341, 345-46 (Tex. App. 2003). It is undisputed that Tyco manufactured the
products at issue, and therefore the statute of repose applies to it. (Pls.’ LR 56(b)(3)
Stmt. ¶ 34.)
It is not clear, however, whether the statute applies to SimplexGrinnell. It is
undisputed that SimplexGrinnell did not manufacture the products at issue. (Id.)
Therefore, for the statute to apply, SimplexGrinnell must qualify as a seller. The statute
defines a seller as “a person who is engaged in the business of distributing or otherwise
placing, for any commercial purpose, in the stream of commerce for use or consumption
a product or any component part thereof.” § 16.012. It is undisputed that
sprinkler heads at issue or the date that such installation started, was substantially complete or was finished,
and therefore have not satisfied their burden. § 508:4-b(II) (stating the term “‘substantial completion’”
means that construction is sufficiently complete so that an improvement may be utilized by its owner or
lawful possessor for the purposes intended.”).
7
SimplexGrinnell is in the business of installing and servicing sprinkler heads, but
whether they place such sprinkler heads in the “stream of commerce” by selling them as
part of the installation process is unclear. (Pls.’ LR 56(b)(3) Stmt. ¶ 34; Defs.’ Resp.
Pls.’ LR 56(b)(3) Stmt ¶ 34.) Therefore, defendants have not established this affirmative
defense with regards to the claims against SimplexGrinnell.
The situation is different with respect to the claims against Tyco, however,
because the record shows that the sprinklers were sold more than fifteen years before the
suit was filed. Plaintiffs judicially admitted the “date of the sale” by saying that they
commenced this action “approximately twenty-eight years after the sale of the defective
sprinklers.” (Pls.’ Mem. Opp’n Defs.’ Mot. Summ. J. 16.); Chow v. Aegis Mortg. Corp.,
185 F. Supp. 2d 914, 916 (N.D. Ill. 2002) (stating that a judicial admission is a statement,
including a representation in a brief, made in the course of “judicial proceedings,
pleadings, or stipulations that is binding upon the party making it.”) (internal quotations
and citations omitted); see United States v. One Heckler-Koch Rifle, 629 F.2d 1250, 1253
(7th Cir. 1980) (holding that a representation in a brief, although “neither in a pleading
nor an affidavit,” nonetheless “may be treated as a [judicial] admission”); see also
Medcom Holding Co. v. Baxter Travenol Labs., Inc., 106 F.3d 1388, 1404 (7th Cir.
1997); Slate Printing Co. v. Metro Envelope Co., 532 F. Supp. 431, 434-35 (N.D. Ill.
1982) (applying federal law in a diversity action to an issue about “judicial admissions”
because it is procedural). Because the Court finds that plaintiffs’ statement regarding the
sale date was a judicial admission, Sears can only avoid the statutes bar if the warranty
exception applies.
8
Sears argues that it does because SimplexGrinnell, in essence, warranted that the
sprinklers had a useful life of at least fifty years when it agreed to perform its inspections
in accordance with NFPA standards, which state that wet sprinklers in use for fifty years
must be replaced or otherwise tested at ten-year intervals. (Pls.’ LR 56(b)(3) Stmt. ¶¶ 16,
27; Pls.’ Mem. Opp’n Defs.’ Mot. Summ. J. 17.)
As previously stated, the warranty exception applies only to manufacturers and
sellers. § 16.012. And, as described above, defendants have not established that
SimplexGrinnell is either. (Pls.’ LR 56(b)(3) Stmt. ¶ 34.) Further, even if the exception
did apply, agreeing to inspect the sprinklers in accordance with certain standards is not
the equivalent of an express written warranty of the sprinkler heads useful life as required
under the statute. § 2.313 (stating that an express warranty is created by either a
affirmation of fact or promise about the goods (such as stating the useful life), a
description of the goods or a sample or model of the goods, that becomes part of the basis
of the bargain); see Elanco Prods. Co. v. Akin-Tunnell, 474 S.W.2d 789, 792 (Tex. Civ.
App. 1971) (holding that instructions that are not part of the basis of the bargain are not
relevant in determining whether there was a breach of an express warranty).
Moreover, plaintiffs have offered no evidence that suggests Tyco made a
warranty. Once defendants have established that the statute of repose applies, plaintiffs
have the burden of establishing that it does not apply through the warranty exception.
White v. Cone-Blanchard Corp., 217 F. Supp. 2d 767, 775 (E.D. Tex. 2002) (holding that
the Texas statute of repose barred plaintiff’s claim where he could offer no evidence that
contracted defendants’ statement that no express warranty was ever made regarding the
9
useful life of the product at issue). Because, plaintiffs’ product liability and negligence
claims against Tyco regarding the Texas stores are barred by the statute of repose, Tyco
is entitled to judgment as a matter of law as to those claims.
B.
Negligence & Strict Liability
Plaintiffs allege that Tyco and/or SimplexGrinnell were negligent for failing to
design, manufacture, test and distribute the sprinkler heads with ordinary and reasonable
care.6 They also allege that Tyco and SimplexGrinnell are strictly liable for, among other
things, manufacturing the allegedly defective sprinkler head. It is undisputed that
SimplexGrinnell did not design, manufacture or test the sprinkler heads. (Defs.’ LR
56(b)(3)(B) Stmt. ¶ 22; Pls.’ LR 56(b)(3) Stmt. ¶ 34; Defs.’ Ex. Q, Thomas McDonald
Aff. 2-3.) Thus, the Court grants defendants’ motion for summary judgment with respect
to plaintiffs’ negligence and strict liability claims against SimplexGrinnell with regards
to designing, manufacturing and/or testing the sprinkler heads.
It is unclear, however, whether SimplexGrinnell was involved in distributing (i.e.,
selling or otherwise placing into the stream of commerce) the sprinkler heads at issue.
See Reeves v. AcroMed Corp., 103 F.3d 442, 449 (5th Cir. 1997) (holding that to be
strictly liable under a products liability theory one must be the manufacturer, seller or
supplier of the defective product); FFE Transp. Servs., Inc. v. Fulgham, 154 S.W.3d 84,
88 (Tex. 2004) (same); Royer v. Catholic Med. Ctr., 741 A.2d 74, 77 (N.H. 1999) (same);
Gavula v. ARA Srvs., Inc., 756 A.2d 17, 20 (Pa. Super. Ct. 2000) (same); Monte Vista
6
Plaintiffs also allege that defendants performed inspections negligently. Defendants’ duty to inspect was
based on its contract with plaintiffs and, is therefore, governed by a different analysis described below. See
supra Part II.B (discussing plaintiffs’ contract based claims).
10
Dev. Corp. v. Superior Ct., 277 Cal. Rptr. 608, 611 (Ct. App. 1991) (same); see also
Sensenbrenner v. Rust, Orling & Neale, Architects, Inc., 374 S.E.2d 55, 57 n.4 (Va.
1988) (“Virginia . . . does not permit tort recovery on a strict-liability theory in productsliability cases.”). Because plaintiffs have not provided any evidence as to this point,
summary judgment is granted regarding the distribution-based negligence and strict
liability claims against SimplexGrinnell.
The Court now turns to the negligence and strict liability claims against Tyco for
the stores in Virginia, Louisiana, Pennsylvania, New Hampshire and California. With
the exception of the incident in Pennsylvania, plaintiffs do not have the allegedly
defective activation mechanism, and therefore, must rely on circumstantial evidence to
prove the alleged defect.
1.
Pennsylvania
In Pennsylvania, a plaintiff need not prove negligence on the part of the
manufacturer, but must only establish that the product was defective, that the defect
existed at the time the product left the manufacturer’s control, and the defect caused the
plaintiff’s injury. Barnish v. KWI Bldg. Co., 980 A.2d 535, 540 (Pa. 2009); Carrecter v.
Colson Equip. Co., 499 A.2d 326, 330 (Pa. 1985) (“In a products liability action
negligence is not an element of the plaintiff’s case, nor is the defendant’s lack of
negligence a defense”). It is undisputed that plaintiffs’ experts evaluated the activation
mechanism from the Pennsylvania store, and opined that it was defective because it
lacked sufficient solder bond at the time of manufacture, which caused the premature
activation of the sprinkler head. (Pls.’ LR 56(b)(3)(C) Stmt. ¶¶ 6, 9; Defs.’ LR 56(a)(3)
11
Stmt. ¶ 26.) Therefore, plaintiffs have created a genuine issue of material fact regarding
whether there was a defect, and summary judgment is denied for the plaintiffs’ strict
liability and negligence claims regarding the Pennsylvania store.
2.
Virginia
Virginia does not recognize the doctrine of strict liability in product liability
cases. See Sensenbrenner, 374 S.E.2d at 57 n.4 (“Virginia . . . does not permit tort
recovery on a strict-liability theory in products-liability cases.”); St. Jarre v.
Heidelberger Druckmaschinen A.G., 816 F. Supp. 424, 427 (E.D. Va. 1993) (stating that
“it is beyond question that Virginia does not recognize a cause of action for strict liability
in tort”). Virginia only imposes strict liability in cases involving abnormally dangerous
or ultrahazardous activities. See Richmond, Fredericksburg & Potomac R. Co. v. Davis
Indus., Inc., 787 F. Supp. 572, 575 (E.D. Va. 1992). The manufacture, design and
distribution of fire sprinkler heads is not an abnormally dangerous or ultrahazardous
activity under Virginia law. See Phillip Morris, Inc. v. Emerson, 368 S.E.2d 268, 282
(Va. 1988) (holding that the storage and disposal of methane gas was not an abnormally
dangerous activity where the risks could have been eliminated by use of reasonable care);
see also Warner v. Norfolk & W. Ry. Co., 758 F. Supp. 370, 371-72 (W.D. Va. 1991)
(explaining that abnormally dangerous activities include blasting, oil-well drilling,
exterminating insects and transporting explosives, but not operating a railroad) (citations
omitted). Therefore, summary judgment is granted with regards to plaintiffs’ strict
liability claim regarding the Virginia store.
12
To recover under a negligence action based on a defective product in Virginia, the
plaintiff must establish that: (1) the goods contained a defect that made it unreasonably
dangerous either for ordinary or foreseeable use; (2) the unreasonably dangerous
condition existed when the goods left the manufacturer’s hands; and (3) the defect
actually caused plaintiffs’ injury. Alevromagiros v. Hechinger Co., 993 F.2d 417, 420-21
(4th Cir. 1993) (citing Logan v. Montgomery Ward & Co., 219 S.E.2d 685, 687 (Va.
1975)). A product is unreasonably dangerous if it is defective in assembly or
manufacture. See Austin v. Clark Equip. Co., 48 F.3d 833, 836 (4th Cir. 1995).
Defendants say that plaintiffs cannot show that the sprinkler heads were defective
or caused plaintiffs’ injuries because the sprinkler head was not recovered from the
Virginia store, and thus plaintiffs’ experts never examined it. To support this argument,
defendants rely on Logan, in which the plaintiff brought a product liability action against
the manufacturer and seller of a stove that exploded in plaintiff’s house. 219 S.E.2d at
685. To prove that the stove was defective plaintiff invoked the doctrine of res ipsa
loquitor, i.e., relied solely on the fact that there was an explosion to prove that there was
a defect. Id. at 687-88. There was no testimony (expert or otherwise) about other
possible causes. Id. The court agreed that the evidence was insufficient to prove a
product defect and affirmed the judgment in favor of defendants. Id. at 689.
The defendants’ reliance on Logan is misplaced. In Virginia, negligence may be
established by circumstantial evidence. Sykes v. Langley Cabs, Inc., 176 S.E.2d 417, 421
(Va. 1970). But when a key piece of evidence is not available, plaintiff must present
evidence tending to negate all reasonable alternative explanations of the accident.
13
See Bolling v. Montgomery Ward & Co., 930 F. Supp. 234, 238 (W.D. Va. 1996);
Lemons v. Ryder Truck Rental, 906 F. Supp. 328, 332 (E.D. Va. 1995) (holding that
plaintiff could escape summary judgment in product liability case where product was no
longer available “only if his evidence tends to eliminate all reasonable possibilities that
some other party or cause is to blame for the accident, or if the facts are such that no
other inference but the existence of a defect in the [product] is reasonable”).
Plaintiffs offered expert testimony that the sprinkler heads were defective due to
insufficient soldering at the time of manufacture, which caused the premature activation
(shortened life) of the sprinkler head. (Pls.’ LR 56(b)(3) Stmt. ¶¶ 6, 9.) They also
offered expert testimony that, after analyzing the seven stores at issue, the sprinkler heads
did not activate from overheating and that any other possible explanations for the
premature activations were ruled out through investigation. (Id. ¶ 7.)7 Defendants offer
no alternative explanation for the inadvertent activation of the sprinkler heads. Because
plaintiffs have presented sufficient evidence tending to negate all reasonable alternative
possibilities for the inadvertent sprinkler activations, the Court denies defendants’
summary judgment motion as to plaintiffs’ negligence claim.
3.
Louisiana
A claimant may only recover under the Louisiana Products Liability Act
(“LPLA”) for damages caused by a manufacturing defect. La. Rev. Stat. § 9:2800.54(A);
see State Farm Mutual Auto. Ins. Co. v. Wrap-On Co., 626 So.2d 874, 876 (3d Cir.
1993). To recover under the LPLA plaintiff must prove that the damage arose from a
7
Although defendant disputes this fact, the dispute is unsupported by evidence in the record as required by
Local Rule 56.1(b)(3)(B).
14
reasonably anticipated use of the product and that the product is unreasonably dangerous
in, among other ways, its construction or composition (including manufacturing).
§ 9:2800.54. A product is unreasonably dangerous in its construction or composition, if,
at the time it left the manufacturer’s control, it “deviated in a material way from the
manufacturer’s specifications or performance standards for the product or from otherwise
identical products manufactured by the same manufacturer.” § 9:2800.55.
Plaintiffs have presented circumstantial evidence and rely on the doctrine of res
ipsa loquitur to establish that there was a manufacturing defect. See Jurls v. Ford Motor
Co., 752 So.2d 260, 265 (La. Ct. App. 2000) (holding that a manufacturing defect may be
established by circumstantial evidence under the doctrine of res ipsa loquitur). In
Louisiana, use of the doctrine res ipsa loquitur is appropriate if:
(1) the circumstances surrounding the accident are so unusual that . . .
there is an inference of negligence [or other fault] on the part of the
defendant; (2) the defendant had exclusive control over the thing causing
the injury; and (3) the circumstances are such that the only reasonable and
fair conclusion is that the accident was [defendant’s fault].
Spott v. Otis Elevator Co., 601 So.2d 1355, 1362 (La. 1992). The plaintiff bears the
initial burden of showing that the theory applies. Id. But it is not necessary for the
plaintiff to “negate all possible causes.” Williams v. Emerson Elec. Co., 909 F. Supp.
395, 398 (M.D. La. 1995). Rather, the plaintiff’s burden is to present the court “with
circumstantial evidence that excludes other reasonable hypotheses with a fair amount of
certainty.” Id.
Defendants argue that plaintiffs cannot establish the exclusive control element or
negate all other reasonable possible causes of the inadvertent activations. The Court
15
disagrees. The “exclusive control” requirement is not strictly adhered to in Louisiana,
and is satisfied “if the circumstances indicate that it is more probable than not that the
defendant caused the accident and other plausible explanations do not appear to be the
probable cause of the accident.” Spott, 601 So.2d at 1362. In effect, Louisiana has
conflated the “exclusive control” requirement with the third requirement of the res ipsa
loquitur doctrine. Id. Therefore, because plaintiffs have provided evidence that tends to
negate all other reasonable possible causes and explanations of the inadvertent sprinkler
activations, they have met their burden for purposes of summary judgment.
4.
New Hampshire
In New Hampshire, plaintiff may bring a products liability action under either a
theory of strict liability or negligence. To recover in a strict product liability case
alleging a manufacturing defect, “the plaintiff must first prove the existence of a
defective condition unreasonably dangerous to the user.” Thibault v. Sears, Roebuck &
Co., 395 A.2d 843, 846 (N.H. 1978) (internal quotation omitted). A manufacturing
defect occurs when the defect is an accidental variation caused by a mistake in the
manufacturing process; that is, where the product does not “conform to the great majority
of products manufactured in accordance with that design.” Id. (quotation omitted). For a
product to be unreasonably dangerous it “must be dangerous to an extent beyond that
which would be contemplated by the ordinary consumer who purchases it, with the
ordinary knowledge common to the community as to its characteristics.” Vautour v.
Body Masters Sports Indus., 784 A.2d 1178, 1182 (N.H. 2001) (quotation omitted). To
succeed on a negligent manufacturing claim, plaintiff must prove that defendant violated
16
its duty of care in the manufacturing of the sprinkler head and that the breach caused
plaintiffs’ injuries. See McConchie v. Samsung Elecs. Am., Inc., No. CIV 99-40-JD,
2000 WL 1513777, at *2-3 (D.N.H. Aug. 11, 2000) (stating that every manufacturer
owes a legal duty “to use due care to avoid foreseeable dangers in its products”) (quoting
Medtronic, Inc. v. Lohr, 518 U.S. 470, 501 (1996)); Willard v. Park Indus., Inc., 69 F.
Supp. 2d 268, 271 (D.N.H. 1999).
Where the plaintiff cannot identify the specific defect, the product defect may be
proven through circumstantial evidence of malfunction and a lack of evidence of other
causes. See, e.g., Maku v. Am. Honda Motor Co., 835 F.2d 389, 392 (1st Cir. 1987); see
also Ricci v. Alt. Energy Inc., 211 F.3d 157, 162-63 (1st Cir. 2000) (“By the very nature
of a fire, its cause must often be proven through a combination of common sense,
circumstantial evidence and expert testimony.”) (internal quotation omitted). Here, as
described in detail above, plaintiffs have provided sufficient circumstantial evidence of a
manufacturing defect to survive summary judgment.
5.
California
In California, to recover in strict liability, a plaintiff must prove that he was
injured by a defect in the product and that the product was defective when it left the
hands of the manufacturer. Ault v. Int’l Harvester Co., 528 P.2d 1148, 1150 (Cal. 1974).
To recover in negligence the plaintiff must prove the same two elements plus an
additional element--that the defect in the product was due to negligence of the defendant.
Crayton v. Rochester Med. Corp., No. 1:07-CV-1318, 2011 WL 475009, at *13 (E.D.
Cal. Feb. 4, 2011). A product may be found defective when it “does not conform to the
17
manufacturer’s intended design.” Carlin v. Superior Ct., 920 P.2d 1347, 1357 (Cal. Ct.
App. 1996). It is well settled that circumstantial evidence may be used to establish that a
product was defective even when the product has been destroyed. Vandermark v. Ford
Motor Co., 391 P.2d 168, 170 (Cal. Ct. App. 1964); see Hughes Tool Co. v. Max
Hinrichs Seed Co., 169 Cal. Rptr. 160, 164 (Ct. App. 1980). Such evidence may be
established by expert testimony and/or evidence of other accidents involving the product
at issue as long as the circumstances of the other accidents are “similar and not too
remote.” Ault, 528 P.2d at 1153 (finding that expert testimony about accidents regarding
the same alleged defective product was admissible to prove defective condition,
knowledge, or the cause of the accident).
Here, plaintiffs provided sufficient evidence to create a genuine issue of material
fact that the activation mechanism was defective at the time of manufacture and that such
defect caused the inadvertent activations. Therefore, plaintiffs have satisfied their burden
on summary judgment, and defendants’ motion is denied as to this claim.
II.
Plaintiffs’ Contract Claims Against SimplexGrinnell
A.
Breach of Contract
Plaintiffs argue that SimplexGrinnell breached two different agreements. To establish
a breach of contract claim under Illinois law, a plaintiff must show: (1) the existence of a
valid and enforceable contract; (2) substantial performance by the plaintiff; (3) a breach
18
by the defendant; and (4) resultant damages. Reger Dev., LLC v. Nat'l City Bank, 592
F.3d 759, 764 (7th Cir. 2010) (citing Illinois cases). 8
1.
Protection Agreement
SimplexGrinnell argues that because there was no reference to F950 sprinkler
heads in either contract, it did not have a duty to warn about their possible defects.
(Defs.’ Mem. Supp. Summ. J. 19.) Plaintiffs argue that since no specific brand or model
of sprinkler head is listed under either contract, SimplexGrinnell’s argument would
render the contracts meaningless. (Pls.’ Mem. Opp’n Defs.’ Mot. Summ. J. 18-19.) The
Court agrees. The Protection Agreement required SimplexGrinnell to perform the
following with regard to sprinkler heads at Sears’ stores in “strict conformance with the
highest industry practices and standards:”
Inspect operations and conditions related to the sprinkler system in
accordance with NFPA [National Fire Protection Agency]
standards;
Inspect and determine if the sprinkler system is in service and in
satisfactory condition;
Inspect reserve sprinkler head supply;
Inquire as to changes in building status that may affect the
performance and reliability of the sprinkler system; and
Compile a complete report of inspection, explain any deficiencies and
recommend corrective action to be taken according to recognized care
and maintenance standards.
(Pls.’ LR 56(b)(3) Stmt. ¶ 15.) The Protection Agreement does not list any specific
sprinkler head or fire sprinkler system. Therefore, because the contract would apply to
no sprinkler heads if interpreted the way defendants suggest, the contract can only
reasonably be interpreted as covering all the sprinkler heads that are part of Sears’ fire
8
The parties agree that Illinois law applies to both contracts. (Defs.’ Mem. Supp. Summ. J. 19; Pls.’ Mem.
Opp’n Defs.’ Mot. Summ. J. 19.)
19
sprinkler system. Krilich v. Am. Nat. Bank & Trust Co. of Chi., 778 N.E.2d 1153, 1164
(Ill. App. Ct. 2002) (holding that unless a contract defines a term, the court must give the
language its common and generally accepted meaning); see Wolfensberger v. Eastwood,
889 N.E.2d 635, 638 (Ill. App. Ct. 2008) (holding that a court must not interpret a
contract in a manner that will render any provision meaningless).
The contract requires SimplexGrinnell to “inspect sprinkler heads,” explain any
deficiencies,” and “recommend corrective action” and perform all services that are
“reasonably inferable as necessary to produce the results intended by this Agreement.”
(Pls.’ LR 56(b)(3) Stmt. ¶ 15; Pls.’ Ex. 6, Protection Agreement at 1, 11.) Plaintiffs
argue that SimplexGrinnell breached the contract by failing to warn plaintiffs about the
improper activations of F950 sprinkler heads or advising them to take any corrective
knew or instituting measures to minimize the risk of potential damages. (Pls.’ Mem.
Opp’n Defs.’ Mot. Summ. J. 20-21.) SimplexGrinnell argues that it did not breach its
duty because it did not have actual knowledge of the improper activation.
The record establishes, however, that SimplexGrinnell had constructive notice of
the activations of F950 sprinkler heads in the absence of fire. Constructive notice is
defined in Illinois as “‘[n]otice arising by presumption of law from the existence of facts
and circumstances that a party had a duty to take notice of’” or “‘notice presumed by law
to have been acquired by a person and thus imputed to that person.’” LaSalle Nat’l Bank
v. Dubin Residential Cmtys. Corp., 785 N.E.2d 997, 1002 (Ill. App. Ct. 2003) (quoting
Black's Law Dictionary 1088 (7th ed. 1999)). First, at least five years prior to the
premature activations at issue here, premature activations of F950 sprinkler heads in the
20
absence of fire occurred in multiple sites across the country, including three owned and
operated by the United States Government, one of SimplexGrinnell’s largest customers,9
and at various privately-owned commercial buildings. (Pls.’ LR 56(b)(3) Stmt. ¶ 22;
Pls.’ Ex. 9, Sprinkler Hazard Alert, at 2-3.) In 2001, after the premature activations
occurred at various government buildings, the United States Department of Energy issued
a “Safety & Health Hazards Alert” about the “suspect deficiencies” of the F950 sprinkler
heads manufactured between 1977 and 1985. (Pls.’ Ex. 9, Sprinkler Hazard Alert, at 23.) Specifically, the Alert talks about inadvertent activations of the F950 sprinkler heads
all over the country, beginning in 1987 and culminating in 2001, and that the failure rate
of these sprinkler heads “clearly exceeds normal design expectations.” (Id.) As a
participant in the industry of inspecting and servicing fire sprinkler systems,
SimplexGrinnell had a duty to know about the failure rate (and potential dangers and
damages) of one of the products it services. This is especially true here given that such
activation had such a direct impact on one of its largest clients. Because the record
suggests that SimplexGrinnell had constructive notice of the problematic F950
activations, plaintiffs have created a triable issue as to whether SimplexGrinnell breached
the Protection Agreement. (Id. ¶¶ 15-17, 22, 24.) Therefore, defendants’ motion for
summary judgment on that claim is denied.
2.
Identification Agreement
Defendants argue that the F950 sprinkler heads were not part of the “Central
Sprinkler Company Voluntary Replacement Program” (“VRP”), and therefore, the
9
Although defendant disputes this fact, the dispute is unsupported by evidence in the record as required by
Local Rule 56.1(b)(3)(B).
21
existence of F950 sprinkler heads did not trigger any action under the Identification
Agreement. (Defs.’ Reply Mem. Supp. Sum. J. 16.) The Identification Agreement
required SimplexGrinnell to determine whether any sprinkler heads in Sears’ stores fell
under the VRP. (Pls.’ LR 56(b)(3) Stmt. ¶ 19.) What is unclear, however, is whether the
F950 model was covered under the VRP. Plaintiffs have not provided any evidence on
this issue, such as what the VRP is and what sprinkler heads it covered (i.e., F950 heads,
recalled sprinkler heads, broken sprinkler heads, etc.). As such, plaintiffs have failed to
create a triable issue of fact as to whether and to what extent SimplexGrinnell breached
its duty to plaintiffs under the Identification Agreement, and therefore defendants’
summary judgment motion is granted as to this claim.
B.
Negligence Based on Contractual Obligations
Plaintiffs argue that SimplexGrinnell owed a duty to plaintiff to perform the
inspection and identification of sprinkler heads mandated by the parties’ contract in a
reasonable manner to protect plaintiffs from reasonably foreseeable damage. To state a
cause of action for negligence in Illinois, plaintiff must establish that the “defendant
owed a duty of care, that the defendant breached that duty, and that the plaintiff incurred
injuries proximately caused by the breach.” Johnson v. Wal-Mart Stores, Inc., 588 F.3d
439, 441 (7th Cir. 2009) (quoting Espinoza v. Elgin, Joliet & E. Ry. Co., 649 N.E.2d
1323, 1326 (Ill. 1995)). Where, as here, the negligence action is based on a contractual
obligation, the scope of the duty is determined by the contract terms. ExxonMobil Oil
Corp. v. Amex Constr. Co., 702 F. Supp. 2d 942, 970 (N.D. Ill. 2010) (citing Melchers v.
22
Total Elec. Constr., 723 N.E.2d 815, 818 (Ill. App. Ct. 1999)); see also Dyduch v. Crystal
Green Corp., 582 N.E.2d 302, 306 (Ill. App. Ct. 1991).
Defendants argue that this case is similar to Eichengreen v. Rollins, Inc., in which
the court found that plaintiff’s allegations of negligence exceeded the scope of
defendant’s duties under the contract. 757 N.E.2d 952, 959-60 (Ill. App. Ct. 2001)
(granting summary judgment for defendant on breach of contract and negligence claims
for failure to install fire alarm equipment in a structure adjacent to a house because the
contract only required defendant to install fire equipment in the house). The Court
disagrees. The Protection Agreement explicitly requires SimplexGrinnell to provide fire
protection services to all of Sears’ stores, which includes inspecting the stores’ sprinkler
systems, determining if those systems were in satisfactory condition and recommending
how to correct any deficiencies. (Pls.’ LR 56(b)(3) Stmt. ¶ 15.) Thus, the record shows
that SimplexGrinnell had a duty to plaintiffs.
The record, however, raises genuine issues of material fact as to whether
SimplexGrinnell breached that duty under the circumstances here, and whether that
breach was a proximate cause of plaintiffs’ damages. (Id. ¶¶ 15-17, 22, 24.) Therefore,
the Court denies summary judgment as to plaintiffs’ negligence claim based on its
contractual obligations against SimplexGrinnell.
Conclusion
For the reasons stated above, the Court dismisses defendants Star Sprinkler, Inc.
and Mealane Corporation as defendants [doc. no. 13] and grants in part and denies in part
23
defendants’ summary judgment motion [doc. no. 128]. The Court grants the motion as to
plaintiffs’ negligence and strict liability claims against Tyco regarding the Texas stores,
plaintiffs’ strict liability claim against both defendants regarding the Virginia store,
plaintiffs’ negligence and strict liability claims against SimplexGrinnell based on
manufacturing, designing, distributing and testing the sprinkler heads and the breach of
contract claim against SimplexGrinnell regarding the Identification Agreement. In all
other respects, the Court denies defendants’ summary judgment motion. Therefore, the
remaining claims are: (1) breach of contract against SimplexGrinnell regarding the
Protection Agreement; (2) negligence (based on contractual obligation) against
SimplexGrinnell; (3) negligence against Tyco for all stores at issue, except Texas; and
(4) strict liability against Tyco for all stores at issue, except Texas and Virginia. The
parties shall be prepared to set a date for the filing of the final pretrial order and a trial
date at the next status hearing on July 13, 2011.
Dated:
SO ORDERED
ENTER: June 23, 2011
_________________________________
RONALD A. GUZMAN
District Judge
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