Kye v. Daimler Trucks North America LLC f/k/a Freightliner LLC et al

Filing 91

MEMORANDUM AND ORDER on 48 MOTION for Summary Judgment Innocent Retailer and in the Alternative, Motions for Partial Summary Judgment and Brief in Support.(Signed by Judge Ewing Werlein, Jr) Parties notified.(kcarr, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
MYONG RE KYE, Individually
and as Representative of the
Estate of Woody Kay, Deceased,

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Plaintiff,
v.
DAIMLER TRUCKS NORTH AMERICA,
L.L.C. f/k/a FREIGHTLINER,
L.L.C.; and FREIGHTLINER,
L.L.C.,
Defendants.

CIVIL ACTION NO. H-10-00805

MEMORANDUM AND ORDER
This is a products liability suit in which Plaintiffs Myong Re
Kye, Individually, and Sun Cha Anderson, as Representative and
Administrator of the Estate of Woody Kay, Deceased (“Plaintiffs”)
seek

damages

from

Freightliner,

LLC

Daimler

Trucks

(“Defendant”)

North
and

America,

LLC

f/k/a

Freightliner,

LLC

(“Freightliner”) for the death of Woody Kay, the driver in a onevehicle tractor-trailer accident.1

Pending is Defendant’s Motion

for Summary Judgment--Innocent Retailer and, in the Alternative,
Motions for Partial Summary Judgment (Document No. 48). Plaintiffs
state

1

in

their

response

that

they

are

unopposed

to

partial

Second Amended Complaint. Although Freightliner is named as
a defendant, Defendant states in its Answer that “there is no
separate entity now known as a “Freightliner L.L.C.”
Document
No. 44 at 1.

summary judgment dismissing Plaintiffs’ marketing, negligence, and
post-sale warning claims and Plaintiffs present no evidence in
support of those claims.2

Defendant’s motion for partial summary

judgment as to Plaintiffs’ marketing defect, negligence, and postsale

duty

claims

is

therefore

dismissed with prejudice.

GRANTED

and

those

claims

are

Remaining for consideration is whether

Defendant is protected from strict products liability as a nonmanufacturing seller under Texas Civil Practices and Remedies Code
§ 82.003. After having considered the motion, response, reply, and
the applicable law, the Court concludes as follows.
I.

Background

Woody Kay died six days after the 2005 Freightliner Columbia
model tractor-trailer (“the truck”), which he was driving on the
Katy Freeway, hit the left barricade wall and careened back across
four lanes to a stop on the right shoulder, engulfed in flames.3
In their Second Amended Complaint, Plaintiffs allege that the truck
was defective and unreasonably dangerous, pleading:

2

Document No. 50 at 4.

3

Id., ex. 1 at 2, 4. The parties dispute whether the truck
hit the barricade and then caught on fire as a result of that
collision, or whether the truck caught on fire because of alleged
defects in the engine, causing Woody Kay to lose control and hit
the barricade.
2

By way of example, and without limitation, the [truck]
was unreasonably and dangerously defective in the
following ways:
a.

the Exhaust Gas Recirculation (“EGR”) valve
components were improperly sealed resulting in a
leakage of combustible fluids (oil) in and around
the engine compartment;

c.

[sic] the EGR valve failed, causing combustible
fluids to be sprayed onto and in the vicinity of
the turbo charger where it was ignited.4

Defendant’s evidence is that it did not manufacture the EGR valve
and did not install the EGR components in the truck’s engine but
rather received the engine as a unit from Detroit Diesel with those
components already in place.5 Plaintiffs agree that Detroit Diesel
designed and built the engine and delivered it to Defendant for
installation.6

It is undisputed that Defendant then manufactured

the truck and sold it to Celadon Trucking Services, on whose behalf
Woody Kay was driving when the fatal accident occurred.7

Defendant

claims that these facts entitle it to protection from liability as
a non-manufacturing seller under § 82.003 of the Texas Civil
Practice

and

Remedies

Code.8

Plaintiffs

argue

that,

as

the

manufacturer of the truck, Defendant is not entitled to such

4

Document No. 40 at 4.

5

Document No. 48, ex. B-2, 31, 37.

6

Document No. 50 at 1.

7

Id. at 3.

8

Document No. 48 at 4.
3

protection.9

The issue presented on summary judgment, therefore,

is the proper construction to be given to § 82.003.
II.

Discussion

Section 82.001 of the Texas Civil Practice and Remedies Code
defines

a

“Manufacturer”

formulator,

constructor,

as

“a

person

rebuilder,

who

is

a

fabricator,

designer,
producer,

compounder, processor, or assembler of any product or any component
part thereof and who places the product or any component part
thereof in the stream of commerce.”
§ 82.001(4) (West 2009).

TEX . CIV . PRAC . & REM . CODE

That section also 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.” Id. at § 82.001(3).

The Texas Supreme Court has stated

that, “[b]y these definitions, all manufacturers are also sellers,
but not all sellers are manufacturers.”

Gen. Motors Corp. v.

Hudiburg Chevrolet, Inc., 199 S.W.3d 249, 256 (Tex. 2006). Section
82.003, entitled “Liability of Nonmanufacturing Sellers,” states
that:
(a)

9

A seller that did not manufacture a product is not
liable for harm caused to the claimant by that
product unless the claimant proves:

Document No. 50 at 6.
4

(1)

that the seller participated in the design of
the product;

(2)

that the seller altered or modified the
product and the claimant’s harm resulted from
that alteration or modification;

(3)

that the seller installed the product, or had
the product installed, on another product and
the
claimant’s
harm
resulted
from
the
product’s installation onto the assembled
product;

(4)

that:
(A)

the seller exercised substantial control
over the content of a warning or
instruction that accompanied the product;
. . .

(5)

that:
(A)

the seller made an express factual
representation about an aspect of the
product;
. . .

(6)

that:
(A)

(B)
(7)

the seller actually knew of a defect to
the product at the time the seller
supplied the product; and
the claimant’s harm resulted from the
defect; or

that the manufacturer of the product is:
(A)

insolvent; or

(B)

not subject to the jurisdiction of the
court.

TEX. CIV. PRAC . & REM . CODE § 82.003 (West 2009) (emphasis added).

5

Defendant provides uncontrovered evidence showing that Plaintiffs’
case is based entirely on their allegations, supported by expert
testimony, that the defective product in this case is the EGR
system and valve, a component of the engine.10

Defendant provides

uncontroverted evidence that it did not manufacture the EGR valve
or the engine.11

Defendant claims that this evidence entitles it

to protection as a non-manufacturing seller because it is “a seller
that did not manufacture a product.”12
Defendant relies on three cases in support of this argument.
All three address improper joinder of a non-diverse defendant for
purposes

of

Federal

diversity

jurisdiction.

Garcia

v.

LG

Electronics USA, Inc. concluded that the non-diverse defendant had
no involvement in the making of the air-conditioning unit at issue
and therefore was a non-manufacturing seller. Civ. A. No. B-11-61,
2011 WL 2517141, at *5-6 (S.D. Tex. June 23, 2011) (Hanen, J.).
Harris v. New Werner Holding, Co. Inc. held that Lowe’s Companies,
Inc. and its salesman who sold the ladder at issue were protected
by § 82.003.

Civ. A. No. 3:08-CV-1750-L, 2009 WL 1211409, at *2-3

(N.D. Tex. May 1, 2009).

Finally, Gonzalez v. Estes, Inc. found

that a distributor of chemicals who “did not label or package the
products or participate in the design of the label or packaging,

10

Document No. 48, exs. E & F.

11

Id., exs. A & B.

12

Id. at 5-7.
6

did

not

modify

participate

in

or

alter

the

installation

products,

of

the

did

not

products,

install

or

or

make

any

representations about the product to Plaintiff or [his employer]”
fell within the protection provided by § 82.003.

Civ. A. No. SA-

10-CA-0038-XR, 2010 WL 610778, at *4-6 (W.D. Tex. Feb. 19, 2010).
All three cases deal with parties who fall within the realm of the
typical non-manufacturing seller that has no involvement at any
level with manufacturing.

Defendant does not cite, nor has the

Court found, any case holding that § 82.003 applies to a party who
does manufacture a finished product that has within that product
component

parts

manufactured

by

others.

On

the

other

hand,

§ 82.003 commonly applies to retail sellers of products.13
Defendant, which points to Plaintiff’s claim that the defect
was in the ERG valve or Detroit Diesel engine and not in “the Truck
as a whole,” has its recourse in the indemnity provision of
§ 82.002.

As the Texas Supreme Court explained in Hudiburg:

13

See e.g., Howard v. Wal-Mart, No. 10-09-00246-CV, 2010 WL
3784918 (Tex. App.--Waco Sept. 29, 2010, no pet. h.) (Wal-Mart);
Dennis v. Giles Group, Inc., No. 04-07-00280-CV, 2008 WL 183062
(Tex. App.--San Antonio Jan. 23, 2008, no pet. h.) (retailer); In
re Zicam Cold Remedy Marketing, Sales Practices, and Products
Liability Litigation, No. 09-md-2096-PHX-FJM, 2010 WL 3516755 (D.
Ariz. Sept. 1, 2010) (HEB); State Farm Fire & Cas., Co. v.
Whirlpool Corp., Civ. A. No. 3:10-CV-1922-D, 2011 WL 3567466 (N.D.
Tex. Aug. 15, 2011) (Best Buy); Watkins v. General Motors, LLC,
Civ. A. No. H-11-2106, 2011 WL 3567017 (S.D. Tex. Aug. 12, 2011)
(Atlas, J.) (car dealership); Romo v. Ford Motor Co., 798 F. Supp.
2d 798 (S.D. Tex. 2011) (Tagle, J.) (Wal-Mart); Chen v. Toyota
Motor Sales USA, Inc., 2011 WL 1900128 (S.D. Tex. May 19, 2011)
(Atlas, J.) (car dealership and national Toyota distributor).
7

Under the statute . . . the manufacturer of a component
product alleged by a claimant to be defective has a duty
to indemnify an innocent seller/manufacturer of a
finished product which incorporates the component from
loss arising out of a products liability action related
to the alleged defect, but the manufacturer of an
allegedly defective finished product has a duty to
indemnify the innocent seller/manufacturer of a component
product for the same loss.
Hudiburg, 199 S.W.3d at 256-57.14

Defendant has not shown itself

to be a non-manufacturing seller within the meaning of § 82.003,
and is therefore not entitled to summary judgment under that
section.
III.

Order

For the foregoing reasons, it is
ORDERED that Defendant Daimler Trucks North America, LLC’s
Motion for Partial Summary Judgment as to Plaintiffs’ marketing
defect, negligence, and post-sale duty claims is GRANTED and those

14

Defendant’s reliance on Fresh Coat, Inc. v. K-2, Inc., 318
S.W.3d 893, 897 (Tex. 2010) is misplaced.
As the statute and
Hudiburg indicate, a component part and the finished product may
both be products for purposes of determining indemnification. This
is not inconsistent with Fresh Coat. The issue raised by Defendant
in its motion is not whether it could seek indemnification against
the engine manufacturer and/or the engine’s component parts
manufacturers, but rather whether it enjoys the blanket protection
of a non-manufacturing seller under § 82.003.
8

claims are DISMISSED with prejudice; and Defendant’s Motion for
Summary Judgment--Innocent Retailer, is DENIED.
The Clerk will enter this Order, providing a correct copy to
all parties of record.
SIGNED in Houston, Texas, on this 30th day of April, 2012.

____________________________________
EWING WERLEIN, JR.
UNITED STATES DISTRICT JUDGE

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